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Short term rental and Airbnb insurance
There are 3 main ways to get Airbnb insurance in Australia: short term rental insurance – which offers flexibility, landlord insurance and Airbnb’s built-in cover.
The right short term rental insurance offers peace of mind if you want to let paying guests use your home.
Landlord insurance can cover you, but restrictions apply. It is usually good for room rentals only – not entire homes.
Airbnb insurance is available through AirCover for Hosts. Cover may not be as robust as a policy bought from an insurer.
What kind of short term rental insurance options are there?
Short term rental insurance in Australia is still in its infancy. However, there are a few types of insurance options out there, including:
1. Short term rental insurance
Brands like QBE can provide you with cover for short term rentals. This type of insurance can provide you with cover for your entire house or apartment, or just the part that's being rented, like a room on Airbnb. Short term rental insurance is often broken down into the following options:
Pay-per-night short stay, which lets you only pay insurance for the day's that your home or room is rented out to a guest.
Short stay rentals, which are for homes that are rented out for most of the year, albeit by multiple guests, and can cover you for up to 12 months.
2. Landlord insurance
Some landlord insurance policies can cover you for Airbnb and other short term rentals, but generally only if you're renting out a room. Most landlord policies have conditions you need to meet in order to be covered. For instance, the property needs to be owner-occupied. In other words, you still need to be living at the house to get cover. Other insurers may consider covering you once you've received a quote.
3. AirCover for Hosts
This type of insurance, also known as host protection insurance, is offered specifically by Airbnb. It protects you and your property with a few different types of liability coverage, as well as other types of safety protection.
Legal liability. AirCover offers up to $1 million (USD) in cover. For example, you can be covered for legal costs if your guest is injured in your home and a dispute arises.
Damage protection for your home, its contents and any cars and boats you own are also included. All Airbnb hosts are automatically covered. So, it's not something that you need to pay extra for. Remember, this type of cover only applies to Airbnb's platform.
This guide mainly discusses how landlord insurance can help you cover your short term rental property.
Landlord insurers that cover short term rentals
Here are a few landlord insurers that cover short term stays for less than 90 days. Remember to compare your options and read through the product disclosure statement if you're unsure of anything.
We update our data regularly, but information can change between updates. Confirm details with the provider you're interested in before making a decision.
AirCover for Hosts or Airbnb insurance can provide you with similar protection to a landlord insurance policy, as well as cover for things like identity theft and accidents. This means you can get cover for the following:
Fire. If a guest is using your kitchen and accidentally starts a fire, you can be covered for repair and rebuild costs.
Theft or attempted theft. If someone steals from you or tries to, short term rental insurance can reimburse you for any costs associated with the theft.
Bursting, leaking, discharging or overflowing. Burst pipes, leaks and more are all generally covered.
Identity theft. If a guest steals your identity, or someone in your home, you can get cover for legal costs and fees.
Malicious damage by your guests. Covers malicious damage by your guests to contents and the building.
Accidental damage by your guests. Reimburses you if your guests accidentally break or damage belongings or the home itself.
Vandalism. If guests vandalise your home, you can get cash towards having it fixed.
Loss of rental income. If your home becomes unable to house guests due to an insured event, you can get reimbursed for the loss of rent.
Temporary accommodation. If your home becomes uninhabitable due to an insured event like a fire.
Tax audit. This can cover the cost of an audit if you need one for the property you're insuring and renting out.
Each policy has different limits and conditions, so be sure to check out the product disclosure statement (PDS) before you buy a policy to find out exactly what's covered and what's not.
Things to look out for when shopping for Airbnb insurance
Home insurance and some landlord insurance policies might not cover you for Airbnb or other short term rentals. Here's why:
No cover for less than 90 days. Landlord insurance generally only covers stays that are longer than three months. Since most Airbnb stays are far less than this, you might not be covered. If you already have landlord insurance and want to use Airbnb, call the insurer and let it know – it might be able to cover you.
In some cases, you can't live on the property. Many people using Airbnb and Stayz only rent out a room. Some landlord insurers only cover you if you are not living at the property.
Home insurance only covers you for personal use. While you probably have a home insurance policy, the cover you get doesn't extend to other guests. As soon as you make an income from the property, you're no longer covered in most cases.
What's excluded from short term rental insurance?
Here's what might not be covered with short term rental insurance:
Some short term rental insurance policies won't cover you for natural disasters. This can include storms, earthquakes, bushfires and floods. Your home and contents insurance policy should cover you.
Any case where you haven't obtained written consent from the owner or landlord to let a room or home.
Any loss or damage that doesn't occur while a guest is staying at the house.
Gradual deterioration or depreciation, including wear and tear.
Any damage caused by insects or vermin.
Any building work, repairs or renovation to your home where the value of the work exceeds a certain amount.
All policies have exclusions. Again, it's best to read the product disclosure statement (PDS) for a full rundown of these.
Compare policies for landlord insurance
Remember, not all short term rental properties will be eligible for landlord insurance. If you're ever unsure, please reach out to the insurer directly.
Frequently asked questions
No, home insurance typically won't cover you for paying guests. It's not meant for properties that are used to generate income.
It depends on your situation and preferences. Short term rental insurance can offer protection against a wide range of risks, including expensive legal costs and accidental damage by paying guests.
Landlord insurance can sometimes offer cover if you're renting out a room.
You could start by reviewing the cover offered by AirCover and see what else you need on top of that.
Whichever option you choose, always compare cover limits and read the PDS so you're fully aware of what is and isn't included in the insurance.
As a host, if you believe your guest is responsible for any damage then you can send them a reimbursement request through Airbnb's Resolution Centre. You can read more about this on Airbnb's guide to host damage protection.
Airbnb's in-built insurance, quoted in US dollars, offers $3 million in damage protection for your home and contents and $1 million in host liability insurance. There's a separate liability cover for Experience hosts.
These numbers might seem high, but by way of comparison, most landlord insurance policies offer $20 million (AUD) in legal liability cover.
Gary Ross Hunter is an editor at Finder, specialising in insurance. He’s been writing about life, travel, home, car, pet and health insurance for over 6 years and regularly appears as an insurance expert in publications including The Sydney Morning Herald, The Guardian and news.com.au. Gary holds a Kaplan Tier 2 General Advice General Insurance certification which meets the requirements of ASIC Regulatory Guide 146 (RG146).
How does Kogan landlord insurance compare? See how it works, and some of the fine print to look out for.
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