Originally published by TJ Ryan, July 22, 2016
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 topped 115,000 in 2017, while Stayz listings are reportedly around the 40,000 mark. As for temporary sharehouse accommodation, Flatmates.com.au apparently makes an introduction every two minutes.
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. If you’re not sure if you’re covered or not, then there’s a good chance you probably aren’t.
The table below displays a snapshot of home & contents insurance products with direct links to the providers’ websites, sorted by Star Rating (highest to lowest). These results are based on a policyholder under 50 years old in New South Wales and ACT for building & contents worth less than $550,000.
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 Lloyd’s of London and Zurich 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, so renting hosts may be better off choosing a full landlord insurance policy.
Airbnb Host Protection Insurance is available for more than one million Airbnb hosts who live in any of the following 26 countries:
- Czech Republic
- The Netherlands
- New Zealand
- South Africa
- United Kingdom
- United States
The insurance does not cover your liability arising from intentional 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 two in three 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 homeowners 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.
Make sure contact your insurer and check your coverage.
Compare home & landlord insurance
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.
But for that extra peace of mind and certainly if you’re planning on offering longer stays, you really need to think about landlord insurance.
Here at Canstar, we regularly research and rate landlord insurance to help you compare your options. Read this year’s star ratings report to find out more about what to look for in an outstanding value landlord insurance policy.