AirB&B Insurance — Do You Actually Need It?
Using a spare room or second home or for short-term lets are excellent ways to earn extra welcome dollars — but, without sufficient AirB&B insurance, you’re putting yourself, your property, and your belongings at risk. Here’s everything you need to know about Airbnb insurance — and how to defend your assets while still enjoying the freedom of profitable letting.Do You Need Air Bnb Insurance?
In short, yes — because you never know what other people will do while on your property. Since Airbnb was launched in Australia in 2011, thousands of people have enjoyed the welcome and easy-to-achieve income provided by the platform. And, now in its twelfth year here in Australia, and facing competition with similar outfits such as Stayz, Homestay, and Vrbo — it’s likely the trend will only increase. But, while the majority of short-term letters have enjoyed trouble-free cash — others haven’t been so lucky. Online news sites are full of disaster stories — such as the house in Box Hill, Victoria, that was totally trashed by Airbnb revellers, or the young child that suffered horrific head injuries while playing on a swing in a rented property garden in Queensland. Events such as these could cause you significant — even life-changing — expense, hassle, and legal claims, making Airbnb insurance in Australia critical.Isn’t Insurance for Short Term Rentals Included in Airbnb Membership?
Most homestay or letting businesses include their own short term rental insurance — the issue is, its scope is seriously limited.
For example, consider the short term home insurance offered by Airbnb — known as Host Guarantee and Protection Insurance. As with many other companies, this cover is free — which should immediately ring your alarm bells. Always read the T&Cs to check exactly what your letting provider is protecting against.
In the case of the Airbnb Home Insurance Host Protection, it safeguards:
- Your legal duty for physical injury to lessees and their guests.
- Your legal duty for damage of property owned by lessees and their guests.
- Your legal duty for common area damage by lessees and their guests — such as foyers and neighbouring properties.
- Limited cover for damage to your building by lessees.
- Limited cover for damage to your contents by lessees.
- Limited cover for damage incurred by a lessee’s assistance animal.
But, this platform-provided short stay insurance doesn’t address weather damage, malicious vandalism, burglary and theft, fire, floods, or other possible events. Furthermore, this free protection doesn’t defend against loss of income due to an insured event — a serious issue if you rely on the money it generates to survive.
Basically, think of the free home insurance for Airbnb as similar to third-party car insurance — while it protects claims made by others, it does little to defend your direct losses.
Airbnb Short Term Rental Insurance in Australia — What You Need
There are key policies, depending on your circumstances, that you need to cover all eventualities for short term renters insurance:Home and Contents Insurance
Your standard contents and house insurance for Airbnb is necessary — but it will typically not address all areas of risk. At the very least, you need to inform your existing home and contents insurer that you’re planning on letting your residential property — or part thereof — on a short-term basis. Even if your insurer permits you to do this under your current home and contents schedule, its protection will be limited only to damage to the bricks and mortar and the internal fixtures and furnishings. Furthermore, most residential home and contents policies forbid any claims that arise from the policyholder’s business activities — which would include short-term letting. This makes your existing policy unsuitable, on its own, to be all-event Airbnb house insurance.Short Term Landlord Insurance
Sometimes referred to as short-stay host protection, short-term landlord insurance works alongside your existing residential home and contents cover — protecting you against damage or loss caused by a renting guest. Some policies provide pay-per-night protection, while others are a one-off fee for the entire year. Generally speaking, they defend against;- Glass breakage.
- Fire, explosions, and floods.
- Malicious vandalism.
- Vehicle and tree impacts.
- Pipe leaks.
- Storms.
- Animal damage.
- Riots.
- Theft.
Commercial Landlord Insurance
If you have a property solely dedicated to short-term or holiday rental — you need specific landlord insurance.
However, not all policies are the same — some insurers will not touch short stays, so always make clear to the provider or broker that you need landlord insurance short term rental cover to be included.
Usually, this landlord insurance for Airbnb properties defends against;
- Accidental damage to property and contents.
- Vandalism.
- Floods, earthquakes, fire, and storms.
- Malicious damage.
- Leaks.
- Theft and burglary.
- Glass and lock replacement.
Additional Risks and Threats With Short-Term Letting
Not all risks, threats, and inconveniences can be solved with short term holiday rental insurance. Some issues are more personal and require a thoughtful and proactive approach by you to ensure safety and well-being. If you’re considering letting a room or part of your home on a short-term basis, consider;Emergency Procedures
An emergency at your short-term let could be anything from a leaking pipe to a raging fire — it’s, therefore, essential you pre-plan the correct course of action should an unwanted event occur. Readily having on-hand contact numbers for rapid callouts is crucial — whether electricians, plumbers, or window installers. Furthermore, create an emergency action plan — including fire extinguisher locations and exit routes in the event of a fire — and communicate this clearly to your guests at the commencement of their stay.A Stranger in Your Home
Consider how comfortable you will feel having a complete stranger in your home. Earning easy cash sounds fantastic, but it’s less appealing if you lose your sense of privacy, comfort, and safety. At the very least, check the ID of your guests and take a copy before their stay. This provides you with peace of mind, and gives you something to take to the authorities if theft or vandalism occurs during their rental.Ensure Clear Boundaries
Even if you’re comfortable with having a stranger rent a room in your house — you probably still don’t want them wandering into your bedroom half-naked in the middle of the night. Make clear to any guests how you expect them to dress and act around your home, which areas they are permitted to enter, and what rooms are totally out of bounds.Security
Although you may trust your guests, it’s probably not wise to promote temptation. Therefore, think about your home security before allowing strangers into your property.
While your landlord’s insurance may cover claims for theft — it’s unwise to leave diamond rings or bundles of cash lying casually around your home.
Furthermore, consider fitting internal door locks to prevent guests from accessing off-limit areas — or installing a CCTV system (within reason, you can’t film guests in the bathroom or their bedroom, and you need to make clear to them that CCTV is installed in your home and where).
The Bottom Line on Insurance for Airbnb Australia
Making the decision to become an Airbnb or other short-term letting host delivers a multitude of benefits — including using spare space to make cash, meeting new and interesting people, and the flexibility of earning income as and when you wish.
However, to protect your assets, investments, your home and belongings — you need to defend yourself with insurance for Airbnb rentals.
Whether you require cover for a single room in your current residence, or a policy to protect a second property — PIB can advise you on the best short term rental insurance in Australia tailored to your circumstances. Call us today to talk about AirB&B insurance.
