Hundreds of Australians are currently travelling or expected to travel over the Easter – ANZAC Day break, with airports seeing capacity crowds for the first time in two years. As many take the opportunity to get away, owners of short-stay holiday homes have been reminded by the Insurance Council of Australia to ensure their valuable asset is protected.
Earning additional income from holiday rentals is a growing market in Australia – since 2016, close to half a million Australian hosts have listed property on a short-stay holiday rental platform, with Christmas, Easter and school holidays often the most popular times.
The ICA has warned that with increased travel and a rise in short-stay rental popularity, many home and contents insurance policies will not provide cover for damage caused by short-stay tenants because the use is considered commercial. It means that a claim filed under a home building or contents policy while being rented by short-stay tenants is likely to be declined and leaves the hosts vulnerable to significant financial loss.
Andrew Hall, CEO of the ICA, said that “Short-term renting is a legitimate and attractive activity that turns many homeowners into short-term landlords, but it’s vital that they do this properly and have insurance cover for the unexpected.
“The Insurance Council is aware of frightening stories of hosts returning after short-term paying guests have departed to find their house stripped of possessions or significantly damaged.
“Short-term rental landlords wouldn’t leave home without locking their property … they mustn’t leave home without the right insurance cover.”
Custom-designed landlord insurance policies are the most appropriate form of insurance, which is a specialty policy and designed for those who self-manage their own properties. Most importantly, it provides cover for accidental or malicious damage caused by guests, personal liability in the instance of a guest injuring themselves or damage to the strata property.
Other key points to consider for short-term holiday renting including checking and updating the details of their insurance, particularly the cover provided and the dates it includes, and any exclusions. The ICA made the point that it is important to remember not to rely entirely on the rental platform’s protection insurance, which may have gaps in the types and level of cover it offers.
Other tips to remember include checking the details of your strata arrangement and local council rules regarding short-stay rentals, doing a home security check and considering removing high-value items from the property.