How to minimise risk when letting property for short-term/holiday
17 Dec 2018
More than 140,000 householders and investors who list their houses and apartments on short-stay rental websites over the summer holidays could be placing their assets and their financial stability at risk, according to the Insurance Council of Australia’s Understand Insurance initiative.
Lisa Kable, spokesperson says householders who offer their houses or apartments on short-term holiday rental websites are likely to find they are not adequately protected by home and contents insurance.
“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," she added.
Choosing the right insurance
According to the ICA (Insurance Council of Australia), 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.
The ICA recommends that homeowners and investors considering short-term letting their properties should:
1. Check household insurance Product Disclosure Statements prior to advertising on short-stay home rental platforms such as Airbnb, Stayz, Homeaway, Flipkey and booking.com. If there are gaps, look for specialist insurance that protects your home and contents while paying guests are staying.
2. Not rely solely on a rental platform’s host protection insurance. There are gaps in the cover offered. Most don’t cover the personal property of the host, cash, pets and public liability in shared areas.
3. Reduce their risk by removing valuables and irreplaceable items such as jewellery, original artworks and collectors’ pieces during the short-term stay.
4.Check strata rules, tenancy agreements and local council laws because they may prohibit short-stay holiday lets.
5. Ensure their property is safe and secure.
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