Lisa Kable, spokesperson for the Insurance Council of Australia’s Understand Insurance initiative, has advised homeowners offering their properties on short-stay rental websites, such as Airbnb and Stayz, to check the terms of their home and contents insurance.

“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,” Ms Kable said.

“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.”

She encouraged investors to shop around for insurance options, as there are a small number of insurers that offer products to property owners who manage their dwellings as short-term holiday rentals.

According to Ms Kable, such insurance options could see the property covered for 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 advised householders to ensure they know the details of their current home and contents insurance to avoid being left out of pocket in the event of a public liability claim, or malicious or accidental damage was caused to their property.

“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. These illustrate the importance of having the right insurance,” Ms Kable said.

The Insurance Council of Australia recommends taking the following steps before putting a property up for short-term rental:

• Check your household insurance Product Disclosure Statements before advertising your property on a short-stay rental platform.
• If there are gaps in the cover, shop around for specialist insurance that protects home and contents when paying guests are occupying the property.
• Do not rely on the rental platform’s host protection insurance as this will likely not cover the personal property of the host, cash, pets or public liability in shared areas.
• Make sure all your valuables and irreplaceable items are removed from the property during the short-term stay.
• Check your strata rules, tenancy agreements and/or local council laws to make sure short-term holiday lets are permitted.
• Take steps to make sure the property is safe and secure.

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