Airbnb – what are your insurance obligations as a host?

Airbnb provides a host guarantee to people renting out their homes, providing some insurance cover, but Marcel Wratt, Intermediate Underwriter at MAS, says it shouldn’t be used in place of insurance.

The host guarantee covers damage caused by guests to the property. However, the cover is subject to a myriad of conditions, one of which being that claims must be lodged before the next guest arrives or within 14 days of the incident.

Significantly, theft of cash, jewellery, art, collectibles and any damage caused to shared common areas of the building are not covered by Airbnb’s host guarantee.

"Hosts can get caught out with these terms and conditions, but if you make yourself aware of what the host guarantee includes and excludes, you might not even need to make a claim on your personal insurance,” he says.

It’s vital for new Airbnb hosts to talk to their insurer to understand the extent of their cover.

“If you operate the Airbnb without notifying your insurer, you run the risk of forgoing any cover at all,” Wratt says.

Even if your insurance covers a traditional rental arrangement, this may not be suitable for Airbnb as there is a continuous flow of new ‘tenants’ coming through the property. It’s important to be clear about your situation by letting your insurer know if you are renting out a room or the entire house. If the home is solely for Airbnb purposes, it will require a commercial insurance policy.

“We have had some scenarios where claims have been made but we weren’t notified about the Airbnb status prior. Claims can be declined on that basis, so don’t assume that it will be in place automatically," says Marcel. 

Insurance extension for Airbnb scenarios possible

“Intentional or malicious damage is a common exclusion for most policies, including MAS’s standard policy, but in an Airbnb scenario, we can provide an extension to cover potential damage with a limit imposed,” he says.

1. Talk to your insurer to establish what cover you have and what additional cover you need to arrange before you welcome your first paying guest.

2. Read up on the Airbnb host guarantee and host protection, and take into account the requirements and timeframes for lodging claims.

3. Ensure you inspect the property prior and immediately after each guest. If you are unable to do this due to distance, make sure you have someone else available to do this.

4. If the property is solely for Airbnb commercial use, you need to arrange a tailored commercial insurance policy.

5. If it is a casual renting situation, make sure to check whether any loss of income caused by damage is covered by your insurer. If your property becomes uninhabitable for a period of time and you have bookings in place that you will no longer be able to take, some insurers provide an extension to cover this lost income.