Holiday Home Insurance Australia
Want to list your home as a short-term rental property on Airbnb or Stayz? Protect your home with landlord insurance first.
If you rent out a property through Airbnb or Stayz – even if it’s just one room in your house – then you’re a landlord, and that means you need insurance.
It’s a growing business – Airbnb listings in Australia are apparently now topping 70, 000 in 2016, Stayz listings are reportedly around the 42, 000 mark, and new kid on the block Aura Travel claims to list over 15, 000 properties already. As for temporary sharehouse accommodation, Flatmates.com.au apparently makes 490, 000 introductions per month.
But in 2015, IAG’s consumer research showed 54% of Airbnb hosts surveyed did not know whether their own home and contents insurance would cover them hosting guests. Spoiler alert: It probably doesn’t.
Insurance for hosts on Airbnb and Stayz
Home and contents insurance for short-term rentals is a specialised industry. There are a few specifically-designed products currently on the market, including Airbnb’s Host Protection Insurance, and ShareCover offered by IAG and NRMA. Then there’s landlord insurance, which will cover you for much more than the standard short-term rental policy.
Airbnb Host Protection Insurance
Airbnb’s Host Protection Insurance program is provided in partnership with a Lloyd’s of London participating insurer to provide hosts with up to $1 million of liability cover. It covers primary liability claims where a guest is physically injured or has their property damaged or stolen during their stay on your property. The insurance can be used even if the host has other insurances over the property as well.
Airbnb’s website says that Host Protection Insurance may also cover claims if a guest damages building property, including claims filed by a landlord if the host is a renter themselves. Landlords are covered only if the guest charges Airbnb and/or the host in their liability claim. Hosts and landlords of renting hosts may be better off choosing a full landlord insurance policy instead of relying on the fact that damage to their property may be covered by Airbnb Host Protection Insurance.
Airbnb Host Protection Insurance is available for nearly 1 million Airbnb hosts who live in:
- The Netherlands
- New Zealand
- United Kingdom (UK)
- United States of America (USA)
The insurance does not cover your liability arising from intention acts to harm the guest, loss of earnings if your guest cancels or cuts short their stay, personal and advertising injury, harm to the guest caused by fungi or bacteria, Chinese Drywall, communicable diseases, acts of terrorism, product liability, pollution, or asbestos, lead or silica.
ShareCover – IAG and NRMA
ShareCover is an extra home and contents insurance product designed for people who list their house or a room on online accommodation sharing services such as Airbnb or Stayz. It is designed to cover short-term stays, so you only pay a premium for the nights that you have a guest staying.
ShareCover covers theft, damage, personal liability, identity theft, and portable valuable contents on holiday rental properties.
ShareCover was launched in 2015 to fill “the protection gap” for hosts, with most standard home and contents insurance policies not covering damage or liability caused by a paying guest. Consumer research by IAG and NRMA showed nearly 2 in 3 Australians who put their homes on Airbnb and Stayz were worried about their property and contents getting damaged or stolen.
Landlord insurance for Airbnb and Stayz
Landlord insurance typically covers the property owner for the entire year as opposed to a few days to a week, and some policies do not cover stays shorter than a few months. But there some landlord insurance policies that are specifically designed for short-term rental situations.
Landlord insurance should cover your property for inclusions such as accidental damage, damage caused by storms and natural disasters, theft or malicious damage by a tenant (a paying guest), public liability in case a tenant is injured on the property.
Importantly, landlord insurance also covers you for loss of rent – which is not covered by most short-term rental policies such as Airbnb Host Protection Insurance and ShareCover. This means that if for example your guest doesn’t pay you or you aren’t able to rent out the property while repairing damage caused by the tenant, your insurance company will cover you for the expected rent.
Why you need landlord insurance
Renting a part of your own home is not usually a scenario covered by ordinary home and contents insurance and can even void your policy, because it is considered a commercial use of the property rather than private use.
If home owners aren’t covered, they can face expensive repairs of their property after a renter leaves. Even worse, they could face expensive public liability claims if a renter is injured while staying on their property – which could amount to hundreds of thousands of dollars.
Insurance Council of Australia spokesperson Campbell Fuller says, “Property owners who are considering renting a room or part of their home via online peer-to-peer house sharing should first check with their insurer.”
IAG CEO Peter Harmer says ShareCover is intended to be used in addition to standard home and contents policies. ShareCover is designed cover a home owner while someone else is paying to stay, even if their standard home and contents insurance doesn’t cover that situation.
But Adam Beu, one of Canstar’s research analysts, says you should still contact your existing insurer and check your coverage. Beu says, “Home owners should be aware they may be exposing themselves to risk by choosing to participate in short-term leasing programs.”
Don’t forget that ShareCover should just be an add-on to a standard home and contents insurance policy. We can help you compare home and contents insurance on our website.