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By Richard Godman
Manager Technical Underwriting, Consumer Insurance
16 November, 2017
Until recently, most New Zealanders’ lives had well defined boundaries that made it easier for insurers to assess and price risk.
But the sharing economy is changing the way we use our assets and belongings – and blurring the lines of traditional insurance policies.
“The core of the sharing economy is people renting things from each other.” The Economist
Why is the sharing economy blurring lines?
The rise of platforms that allow us to rent out our personal belongings mean that people are now making money from their cars, homes, clothes and even their money.
This raises questions for insurers about when something you own stops being for personal use, and starts to be a commercial asset.
For insurers, the sharing economy changes the amount of risk that assets face and makes it harder to put things into traditional commercial and personal insurance buckets.
For example, a basic house insurance policy covers owner-occupiers on the assumption that only close friends and family will be invited to their home. But listing a home on Airbnb opens the door to strangers staying in the family home, and the risks that come with not knowing who your guests are.
Personal or commercial - why does it matter?
At Vero, we’re developing new ways to help our customers better protect themselves as they embrace Airbnb, Uber, and other assets of a sharing economy.
But if you’re making money from your assets, especially a car or house, it’s possible a commercial insurance policy will suit your needs better than a personal one. You may not even need to pay more in premiums.
If you’re not sure whether your policy covers how you’re using your assets, speak to your insurer or broker about the insurance you have in place and whether you need a different solution to meet your needs.
Are you covered? What to look out for in your insurance policy:
Another option is to check with the platform you’re using to rent out your belongings. Some platforms may offer built in insurance cover, but it’s important to check the limits and how those compare to your own insurance policies.
Temporary rentals versus traditional tenanted properties
If you’re letting out a home on Airbnb, it’s important to remember that traditional insurance for rental homes may not cover you.
That’s because temporary rentals have more visitors, and fewer checks, compared to a normal tenancy agreement. For example, Vero’s policy defines a ‘tenant’ as someone who holds a tenancy agreement with you that’s not less than 90 days.
Landlord cover often contains conditions around how you select and inspect your tenants that you’re unlikely to be able to meet through platforms like Airbnb, so don’t assume that traditional landlord insurance will cover you.
For more information about insurance with Vero when you’re listing your home on Airbnb, see here.
Want more information?
For more information, see Vero's House insurance and Car insurance options. Or if you're ready to buy a policy or need personalised insurance advice, contact a broker or adviser.
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By Richard Godman
Manager Technical Underwriting, Consumer Insurance
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.
