The arrival of online short-term rental sites such as Airbnb and others, created a whole new landlord-tenant relationship: one where owners, or ‘hosts’, are encouraged to provide all sorts of extras.
But when things go wrong some hosts discover, all too late, that their insurance cover isn’t as hospitable as they are, as our sponsors, CHU Insurance, explain …
While the basic principles seem the same, hosting short-term is a lot different from renting long-term. Instead of the traditional landlord and tenant relationship, short-term hosts are more like hotel owners, and guests can be a lot more demanding and a lot more of a risk. In fact, when you rent on a short-term accommodation site, you’ve actually have turned your home into a commercial property and this almost always affects your insurance.
Strata insurance specialists, CHU were amongst the first to include cover for short-term letting including AirBnb cover in their regular landlord insurance, and suggest five key points for hosts to keep in mind, whether they’re with Airbnb or any of the other hosting sites:
- You may be exposed to damages claims.
The most innocent activities can put the host liable for damages incurred by guests. For example, if you provide bicycles for guests to use, the insurance on those bikes might not extend beyond the boundary of your property. Similarly, a guest injured on a backyard swing in your rental, can result in a huge financial headache for you. Check your policy wording for any limitations or exclusions.
- Check your landlord insurance.
Not all landlord insurance is the same, and in fact, some landlord insurance does not cover short term rental at all, leaving you fully exposed, while others charge extra for it to be added on.
- Know the limits of host protection insurance.
Airbnb provides host protection insurance but there are exclusions such as deliberate damage. Because of its profile and reach, Airbnb is one of the more progressive agencies – other short-term rental agencies may not provide adequate insurance at all.
- Be sure of what is included or excluded.
Even if you’re sure your insurance covers short-term rentals, always check the policy to identify what is and isn’t included. Common items to look for, are coverage for cash, securities, pets, personal liability and common areas.
- Are you even allowed to host short term?
Some councils and body corporates/owners coporations are clamping down on short-term rentals. Whether you’re a tenant or an owner, before you list your property, make sure you’re actually allowed to offer it as a short-term rental. Violating local by-laws or permissions can affect or even negate some insurance policies.
Some insurance policies, such as CHU Landlord Insurance, automatically* cover short-term rentals including Airbnb, HomeAway (formerly Stayz) etc, however some do not.
This article was supplied by CHU Underwriting Agencies.