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By Richard Godman
Manager Technical Underwriting, Consumer Insurance
1 June 2023
These days many New Zealanders are turning to accommodation websites like Airbnb, hosting guests in their homes to gain a bit of extra income or assist with their mortgage repayments.
Inviting guests into your home brings added risk that something could go wrong, and we encourage our customers to make sure that their house is safe and protected.
If you’re keen to maximise the value of your asset by turning your home or bach into an income-earner, it's important to understand how it will affect your insurance.
1. Airbnb & insurance:
top tips to make sure you’re covered
If you have a Vero home policy for the house you live in, and it is insured for Cover Option - Maxi (our highest level of cover), it will automatically be covered for any accidental damage caused by guests in your home - including Airbnb guests.
But you’ll need to make sure that you’re meeting your normal policy conditions, including letting us know if you are not living in the home. Accidental damage caused by paying guests is also subject to an extra excess, on top of your standard excess, and there is no cover for malicious, intentional or deliberate damage by paying guests.
If you're letting out a bach or investment property that you don't normally live in, you may need different cover. Check out this blog on how the sharing economy affects insurance for more information.
1
Unoccupied homes
If you’re letting out a home that you don’t live in, make sure you’ve told your insurance company that it’s unoccupied. You also need to make sure you’re keeping it tidy and secure in order to maintain your cover. That just means doing simple things like keeping the gardens neat, locking doors and windows, emptying the letterbox, and making sure the house is regularly inspected.
2
Multi-unit homes
If you’re in a block of flats, an apartment building or a terraced house make sure to check your body corporate arrangement. Most body corporates will hold insurance over your entire complex, but some body corporates don’t allow individual units to let out their homes on a short-term basis.
3
Protecting your guests
If you’re listing your home on Airbnb or other similar sites, you’re taking on some added liability, so make sure your insurer covers you. For example, in some circumstances, if a guest is injured in your home, you could be required to cover some of the costs of their medical care or compensate their lost income. Vero’s home policies can provide cover for these costs.
2. Prevention is the best cure
for protecting your home
Insurance policies don’t cover you for malicious or deliberate damage caused by guests that you’ve invited into your home, so if you’re letting out your home, prevention is the best cure.
Airbnb has lots of safety features to help you protect yourself. The site takes the credit card and profile details of your guests, so you know who they are. You can also check guests’ reviews and make sure you’re only hosting guests with positive feedback ratings 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 other secure location, 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 that it is listed on your insurance policy.
Take a security deposit
Through Airbnb, you can choose to take a security deposit from your guests to cover you in case of minor 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 through Airbnb, make sure your home is safe. One of the best (and easiest) things you can do is install smoke alarms, and regularly check that they’re working.
It’s also a good idea to make sure you don’t have any loose wiring, faulty appliances or dangerous or exposed heaters.
3. Host protection
Some accommodation sites offer guarantees or protection of their own, so it’s a good idea to check what’s available before listing your home.
For example, Airbnb does offer a Host Guarantee to provide protection for damages (in New Zealand the guarantee is for 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.
4. Making a claim
If your Airbnb guests cause any accidental damage, the first step you should take is to check whether the costs are covered under 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, so if that happens you’ll need to contact Airbnb.
If in doubt, check before you host
If you’re not sure whether or not your insurer covers you when you rent out your home, get in touch with your insurance broker or adviser to find out more.
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Keep reading
Today Vero announced an industry-leading policy benefit called SumExtra that will extend homeowners’ insurance cover in the event of either a natural disaster or other insured loss.
SumExtra offers customers who have personalised their sum insured based on an estimated cost to rebuild their home, additional cover in the event of a loss even if those costs exceed their sum insured amount.
The information in this article has been compiled from various sources and is intended to be factual information only. Full details of policy terms and conditions are available from Vero Insurance New Zealand Limited or your financial adviser. For advice on product suitability, please contact your financial adviser. While we take reasonable steps to ensure that the information contained in this article is accurate and up-to-date, it is subject to change without notice. Vero Insurance New Zealand and its related companies does/do not accept any responsibility or liability in connection with your use of or reliance on this article.
