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While Airbnb is a good way for Kiwi homeowners to augment their income, there are some things that they need to consider to prevent losses in the event of a disaster.

Before letting their property, it is important that homeowners inform their insurance company of their intention: so they can be informed if their existing policy would respond to an Airbnb situation.

For those who intend to let their property from time to time, their existing policy may still apply, but with a few conditions, Fairfax Media reported.

Generally, insurance policies do not provide cover for loss or damage caused by people that are invited into the property, including Airbnb tenants.

“Loss intentionally caused by tenants or guests is generally excluded, except cover is still provided if the loss is as a result of fire or explosion,” Ralph Hart, IAG’s manager of personal lines underwriting solutions told the publication. “Some policies are able to be extended to provide some cover for intentional acts, vandalism, or theft by tenants’ but a sublimit is likely to apply.”

For those who intend to rent their property more regularly, they might need to take out a landlord policy.

Hart said a different type of insurance may be required for a property that was only used for short-term stays, because normal EQC cover might not apply.

Adam Heath, Vero’s EGM of portfolio and product, said there were others things that homeowners need to consider.

“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,” Heath told Fairfax.

Airbnb has a limited “host guarantee,” which covers up to $1.3 million in damages. Both Airbnb and insurers agree that it should not replace an insurance policy, the report said.



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