More than 140,000 householders and investors who list their houses and apartments on short-stay rental websites over the summer holidays could be placing their assets and their financial stability at risk.
Lisa Kable, spokesperson for the Insurance Council of Australia’s Understand Insurance initiative, said: “Householders who offer their houses or apartments on short-term holiday rental websites are likely to find they are not protected by home and contents insurance.
“We conservatively estimate more than 140,000 properties that are usually either owner-occupied or rented out long-term will be listed for short-term rentals these holidays.
“However, owners may not realise that most insurers regard short-stay holiday rental as a commercial use of the property because the likelihood something will go wrong are higher.
“A home building or contents claim incurred while a property is being rented out may be declined, leaving the owner financially vulnerable to financial loss and other liabilities.”
Ms Kable said a small number of insurers offer a product to property owners who self-manage their home as a short-term holiday let.
“The product is inexpensive, ” she said.
“It covers paying guest-related accidental or malicious damage, theft or attempted theft, personal liability if a guest sues for damages, identity theft, and strata property damage.”
She said a short-term landlord insurance policy can cover the property if it is professionally managed.
Homeowners and investors considering short-term letting their properties should:
Check household insurance product disclosure statements prior to advertising on short-stay home rental platforms such as Airbnb, Stayz, Homeaway, Flipkey and booking.com. If there are gaps, look for specialist insurance that protects your home and contents while paying guests are staying
Not rely solely on a rental platform’s host protection insurance. There are gaps in the cover offered. Most don’t cover the personal property of the host, cash, pets and public liability in shared areas
Reduce their risk by removing valuables and irreplaceable items such as jewellery, original artworks and collectors’ pieces during the short-term stay
Check strata rules, tenancy agreements and local council laws because they may prohibit short-stay holiday lets
Ensure their property is safe and secure
Ms Kable said malicious or accidental damage caused by a paying guest to a property or a public liability claim could cost a homeowner hundreds of thousands of dollars.
“I have heard frightening stories of homeowners returning after short-stay guests have departed to find a completely empty house or that their home has been used for illegal activities,” Ms Kable said.
“These illustrate the importance of having the right insurance.”
Last year, six million holidaymakers globally booked their short-term home accommodation through an online platform.
These guests may find their domestic or international travel insurance doesn’t offer cover if they unexpectedly need to cancel their accommodation or their belongings are damaged or stolen during their home stay.