This is the first question that you should ask yourself if you are considering renting your property on Airbnb.
Are you renting your whole house or unit on Airbnb or perhaps just renting out a room? Have you got the right cover? What will happen if one of your guests injures themselves or worse still, dies due to a fault with your property?
If you think your home building and contents insurance will cover you in the event of an accident, you may be in for a rude shock. Household insurance will generally only cover you for non-commercial activities.
If you rent your property on a one-off basis then your home insurer may allow this if you inform them prior or they may allow it and you will have to purchase a specific endorsement so that you are adequately covered.
If you are regularly renting your whole property out on Airbnb or regularly renting out a room of your property, then this will be deemed to be commercial activity or business activity and your home insurance will not cover you. If someone injures themselves in your property due to your negligence you could be up for hundreds of thousands of dollars or more in compensation. This would financially ruin most people, but it is completely avoidable with the right insurance cover in place.
Landlord insurance policies are available and may offer broader cover than short term policies, but beware, they may only cover you for long term rentals. Check with your insurer rather than take a ‘she’ll be right’ attitude and end up losing all your assets.
There are specific insurance policies available for short term rentals and Airbnb offer their own insurance. IAG also offer a policy but you should ensure that whatever policy you choose, it is right for your circumstances.
You should check what the policy covers you for and what exclusions are applicable. Some things that you should make sure are included are as follows:
- Theft of items in your home;
- Damage to your home;
- Personal liability in the event of injury or death to your guests; and
- Identity theft.
You should look carefully at the exclusions and limits on the amount payable in certain categories of coverage. If loss of rent if your guests cancel or cut short their stay are important to you, you should note that most short term stay policies don’t cover this. You may have to pay for an extension to your policy to cover this.
The bottom line is, do your research and insure yourself properly. Be open and honest with your insurer. Then, if the worst happens your insurer can deal with the claim and you can rest assured that you are protected.