Short term rental and Airbnb insurance
Airbnb insurance Australia: What you need to know and where to get cover for your short term rental.
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If you're one of the many people taking advantage of short-term rental platforms like Airbnb and Stayz, then you need to make sure you have the proper short-term rental insurance. There are a few Airbnb insurance options out there, so we've laid them out for you to compare below.
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:
Short term rental insurance. Brands like ShareCover 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.
Landlord insurance. Some landlord insurance insurance policies, like Budget Direct, can cover you for Airbnb and other short term rentals, but generally only if you're renting out a room. Most 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.
Host protection insurance. This is a type of insurance offered specifically by Airbnb and protects you and your property with legal liability cover. Basically, if a dispute arises between you and your guest, you can be covered for legal costs. All Airbnb hosts are automatically covered so it's not something that you need to pay extra for. However, you won't be covered for anything else. For example, if your guests damage your belongings or accidentally start a fire, you'll have to pay for this yourself.
- This guide will mainly discuss how landlord insurance can help you cover your short term rental property
Landlord insurers that cover short term rentals
Here are how some landlord insurance providers that cover short term rentals like Airbnb. Just make sure you understand the conditions before making a decision.
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 does Airbnb insurance cover?
Short term rental insurance 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.
What's excluded from short term rental insurance?
All policies have exclusions. 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 licensed hotels, motels, resorts or similar licensed venues that are not considered residential accommodation will not be covered.
- 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.
- Any damage caused by roots of trees, plants or shrubs.
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.
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