@Nikki433So you don't know what cancellation policy you have? You need to check that in your settings.
If you are talking about a non-refundable option, guests are not forced to choose that. The cancellation policy would read "Strict or non-refundable". The "or" means that guests are given the option when they go to book- they could choose the Strict policy or the non-refundable options.
But the Extenuating Circumstances policy trumps the non-refundable. If Airbnb decides a guest cancellation qualifies under the EC policy, the guest will be fully refunded.
P.S. You need to go back and edit your listing description. There is not nearly enough information provided. Fill out all of the fields provided- The Space (describe the rooms and the house layout, outdoor areas, etc), Guest Access, Other Things to Note.
And you have made an error a lot of new hosts do- your guest count and set-up are at odds. You are listing for 8, but only appear to have dining table and living room seating for 6. Either lower your guest count to 6 or furnish the other areas so they are suitable for 8.