Published with permission from Vero Insurance New Zealand.
There are a lot of Kiwi’s turning to accommodation websites, like Airbnb, to earn some extra income by hosting guests in their own homes. Having paying guests on your premises brings added risk that something might go wrong, and it’s encouraged you to make sure your home is safe and secure. If you want to maximise the value of your assets by turning your home or bach into an income-earner, it’s important to understand how it will affect your insurance.
Tips to make sure you’re covered
1. Airbnb & insurance:
Some insurers’ home policies, for the house you live in, will automatically be covered for any accidental damage caused by guests in your home – including Airbnb guests. You won’t need different cover – but you’ll need to ensure you’re meeting your normal policy conditions, including letting your insurer know if you are not living in the home. Damage caused by paying guests is also subject to an extra excess, on top of your standard excess.
If you’re letting out a bach or investment property you don’t normally live in, you may need different cover.
2. Empty homes
If you’re letting out a home you don’t live in, make sure you’ve told your insurance company it’s unoccupied. You also need to ensure it’s tidy and secure to maintain your cover. This means simple things, like mowing the lawns regularly, keeping the gardens tidy, locking doors and windows, keeping the letterbox empty, and regularly checking over the house.
3. Multi-unit homes
If you’re in a block of flats, an apartment building or a terraced house, make sure you check your body corporate rules. Most body corporates have insurance over the entire complex, but some will not allow individual units to let their space on a short-term basis.
4. Protecting guests
If you’re listing your home on Airbnb or similar sites, you’re taking on added liability, so it’s best to be sure your insurer will cover you. For example, in some circumstances, if a guest is injured while on your property, you may be required to cover some of their medical costs or compensate their lost income.
5. Prevention is the best option
Insurance policies will not cover any malicious or deliberate damage caused by guests you’ve invited into your home. If you’re letting out your home, prevention is always the best cure.
Airbnb has lots of safety features to help you protect yourself. The site takes credit card and personal details of guests so you know who they are. You can also check over reviews and make sure you’re only hosting guests with positive feedback or that you’re comfortable with. But there are a few extra steps you can take to make sure you’re even more protected.
- Take care with your belongings
Secure all your valuables. Lock jewellery into a safe or put somewhere well out of site, and don’t leave cash lying around. If you’ve got expensive artwork, it could be worth storing it out of the way – but if you can’t, make sure it’s listed on your insurance policy.
- Take a security deposit
Through Airbnb, you can choose to take a security deposit from your guests to cover things in case of damage. For example, if your guest breaks a window or smashes some plates, you can take it out of their security deposit – which means you don’t need to make a claim on your policy or pay an excess.
- Keeping things ship-shape
When you host guests on the Airbnb platform, make sure your home is safe. One of the best (and easiest) ways is to install smoke alarms, and regularly check they’re working. It also pays to check for any loose wiring, faulty appliances or dangerous heaters.
6. Host protection
Some accommodation sites offer guarantees or their own protection, so it’s a good idea to check what’s available before listing your home. Airbnb offers a Host Guarantee to provide protection from damages (in New Zealand the guarantee is up to NZ$1.3 million), but this doesn’t replace insurance. You can check the Airbnb website here for details of the Host Guarantee.
7. Making a claim
If your Airbnb guests cause any accidental damage, the first step is to check whether the costs are covered by Airbnb’s host guarantees. If they are, it may mean you don’t need to make a claim at all.
If you do claim on your insurance policy, make sure you’re honest at claims time about the circumstances of the claim. If you’ve been hosting, the excess on your claim may be a little more, but the cost of having your claim declined could be far higher.
If any of your guests cause deliberate damage, you’re not likely to be covered by your insurance policy, if that happens, you’ll need to contact Airbnb.
If in doubt, check before you host!
If you need to get additional cover for your unoccupied holiday home, contact the team at Over Fifty Insurance for some advice based insurance.
