What is short-stay accommodation?
Short-stay properties are those rented out for brief periods, typically by private owners via platforms like Airbnb or Stayz. They offer an alternative to hotels, often taking the form of fully furnished apartments, houses, or private rooms within a home.
If you’re planning to rent out your property this way, it’s important to comply with local regulations governing short-term rentals. You’ll also need appropriate insurance to help protect against potential loss or damage.
What are the options for short-term rental insurance?
When it comes to home insurance for your short-stay accommodation property, there are three main options to consider:
1. Short-term rental insurance
Some insurers offer policies specifically tailored for short term rental properties. This type of coverage can be tailored to your specific situation, covering a whole house or apartment, or just a room, depending on how much of the property you’re renting out. It may be possible to take out cover for a specific number of nights, or if you want to be insured for a longer period, you may also have the option to choose six or 12 months.
2. Landlord insurance
Some landlord insurance policies may provide cover for short stays, although it’s worth researching the policy carefully before signing up, as this cover might be limited. For example, these policies may exclude cover for theft or burglary from guests, loss of rental income, and costs associated with recovering unpaid rent.
3. AirCover for Hosts and Stayz cover
AirCover for Hosts is a specific type of insurance that is offered by Airbnb, for hosts that use its platform. Per the Airbnb website, it includes $3M USD in cover for damage done by guests to your property and belongings, and $1M USD liability insurance for guests, in the event that they are hurt or their belongings are damaged or destroyed. It also offers 24-hour safety line for hosts.
Airbnb cautions that AirCover is not a substitute for personal insurance. If you want the best Airbnb insurance for Australia, you may want to consider another overlapping policy of landlord insurance or short-stay insurance, depending on your needs.
Stayz also offers some limited protection for hosts, including $1M in liability insurance. Once again, if you are renting out a property on this platform, you may also want to consider a suitable short-stay or landlord insurance policy.
What does short-term rental insurance cover?
Short-term rental insurance covers you for loss or damage to properties that are rented out for short periods of time. It can cover both the building and contents, and depending on the policy, it can cover:
- Accidental guest damage
- Death of a guest
- Fire damage
- Legal liability
- Loss of rent
- Malicious guest damage
- Natural disasters
- Pet damage
- Tax audits
- Water damage
Depending on the provider or cover, there may be an excess payable on some claims.
Does regular home insurance cover short-term rentals?
Most standard home and contents insurance policies will not cover paying guests in your home, as this is considered a business activity. For example, you may not be covered for theft or loss or damage caused by an intentional act by a guest. Landlord insurance or short-term rental cover may be able to cover some of the risks that a standard home and/or contents insurance policy may not include.
Short-term rental insurance vs temporary accommodation cover: understanding the difference
Renting out your home or a room for short stays can be a great way to earn extra income—but it also comes with unique risks. Having the right insurance is essential, and it’s important to know the difference between short-term rental insurance and temporary accommodation cover.
From an insurance perspective, the two serve very different purposes: one protects you while you’re hosting guests, the other protects you if you can’t live in your own home. To make it easier to understand at a glance, here are the key differences:
Short-term rental insurance
- Covers accidental damage or theft caused by guests
- Protects against loss of rental income
- Designed specifically for properties rented out on a short-stay basis
Temporary accommodation cover
- Pays for alternative accommodation if your home becomes uninhabitable
- Triggered by insured events like fire, storm, or flood
- Part of a standard home insurance policy, not specifically for hosting guests
Knowing which cover you need is crucial before you list your property. One keeps your guests—and your income—protected, while the other ensures you’re covered if you can’t stay in your own home.
Why is short-term rental insurance important?
Renting all or part of your home out is a commercial use of the property, and this can void your regular home and contents insurance, so if you plan on doing this, then it’s vital to have appropriate insurance cover.
Without this, you could face an extensive repair bill if a renter damages your property. Even worse, you could face an expensive public liability claim if a renter is injured while staying on your property, which could cost a significant amount of money.
If you aren’t sure about what’s covered under a landlord insurance policy you hold and you’re considering turning your property into a short-stay, you may want to contact your insurer, check your coverage, and if necessary, take out a new, appropriate policy to cover yourself.
Is short-term rental insurance tax deductible?
Your shortterm rental insurance premiums may be tax deductible in some cases, similarly to landlord insurance. Consider seeking professional advice from a tax professional before making any changes that may affect your taxes.
