What insurance is required for an Airbnb holiday rental home
If you already own or are thinking of setting up an Airbnb holiday rental home then you have to spend some time understanding what insurance is required because many general insurers often do not cover holiday rental homes, and if they do, the insurance is more than often inadequate.
Organising specific holiday home insurance is essential in order to protect both you and your guests. If you fail to have adequate insurance cover you are exposing yourself and your guests to unnecessary risk and lots of potential costs.
This is what one of our property owners told us;
“We have a holiday home insurance policy that provides both the standard building and contents insurance as well as the public liability insurance. In addition, we have $20,000 coverage for loss of rent in the event that we have to close the property for a period of time.”An owner says…
Building & Contents Insurance
As per your usual home insurance you should make sure that you have both building & contents insurance. You should also check that your contents insurance covers malicious damage in the unlikely event that someone willfully causes damage to your property.
Typically this provides coverage for the building and the items within it against risks such as fire, storm damage, and theft. It’s important to check with the insurer to confirm that short-term rentals are covered, as we mentioned, standard policies may not include this.
Public Liability Insurance
Public liability insurance provides protection for you in the event that something should happen to a guest on your property. It is your legal protection if you are found to be responsible for personal injury to a visitor at your property (including both guests and others).
This is crucial for covering legal costs and compensation if a guest is injured or their property is damaged while staying in the rental property. Some home insurance policies include public liability cover, but again, it’s essential to ensure that this extends to Airbnb guests.
It is important to note that in NSW $20m Public Liability insurance is mandatory as part of the short term rental code of conduct.
Rent protection
In the event that your holiday rental property is unavailable for rental due to an insured event (e.g. flood, fire, etc) rent protection cover will pay for the loss of rent that you incur up to a specified amount.
Landlord Insurance
This type of insurance is designed specifically for rental properties. It can cover loss of rental income, malicious damage by tenants, and additional legal liabilities. Not all landlord insurance policies cover short-term rentals, so property owners should verify this with their insurer.
Building Insurance (for Strata Properties)
If the property is part of a strata title (such as an apartment), the body corporate’s building insurance may cover the structure. However, property owners should still ensure they have appropriate contents and liability insurance.
Airbnb Host Protection Insurance:
Airbnb offers its own Host Protection Insurance, which provides primary liability coverage up to $1 million USD per occurrence. This can serve as an additional layer of protection but should not replace standard insurance policies. You can read more about it on Airbnb’s website here.
Professional Holiday Homes have a team of Airbnb property managers who can give you advice on what you will require for your specific property to ensure you are organising the right level of insurance cover. We often advise property owners to speak with an insurance broker or their insurance provider to understand the specific coverage and any exclusions related to short-term rentals. This ensures they have comprehensive protection tailored to your particular situation.
