On a daily basis we are seeing posts from hosts seeking information about insuring their properties while hosting, so I felt it is about time to lay out the landscape where hosting insurance is at in this country, (Australia).
Here is Australia we are fortunate to have a number of good insurance options available and, I would urge every host to take note of these options and use one or the other. This being a possibly less litigious society than the US, companies are more inclined to insure the hosting risk here! Also the volume of hosting in this country has risen to the point where companies are now seeing hosting insurance as a valuable addition to their risk portfolio.
Firstly there has been a lot of talk, and possibly misplaced trust, in Airbnb's Host Protection Scheme (HPS)! This product is more loaded to protection from catastrophic damage, has extreme limitations on it, and in general should not be relied upon for protection a host is likely to require in their hosting experience. Even Airbnb state you should avail yourself of other cover options before trying to use this product. Typical of the sort of claims that Airbnb have declined to adequately address are....... a host's kitchen benchtop which was ruined when a guest put a saucepan from the stove directly onto the bench. The entire kitchen benchtop had to be replaced with a cost of many thousands of dollars.....at the hosts expence.
Another hosts outdoor furniture setting was ruined by a guests careless cigarette burn to one of the cushions. Once again, they were on their own. These are the events that you need insurance protection for and will find satisfactory compensation from the HPS virtually impossible.
To insurance options:
If you have a household general insurance policy there is every possibility the company will cancel your policy if they find out you are in a short term rental agreement with a hosting platform. I have had this advice direct from 4 major insurance companies, so, I would consider this stance to be the norm!
Terri Scheer are specalists in Landlord/Tennant insurance but do not get involved with short term rental agreements with a hosting platform or a shared property situation. Great if you are a landlord who has a rental property on the open rental market but will not entertain Airbnb.
If you are listing a shared property (that is, on the same residential allotment) or a self contaned property and you are hosting a few guests per month there is a company called Sharecover! Above is a link to this company. This is the insurer I use, and is a part of the largest insurance group in Australia. Sharecover insures specifically for the Airbnb and the Stayz platforms. You only pay for cover for the nights that guests are on your property, and the cost of cover is from $3.50au per night. It does not take the place of general insurance....it's an addition to it.
You apply online in seconds and are issued a PDF of the policy document on the spot. You can literally insure as the guest walk to the door of your listing!
AAMI have just recently (In February) introduce an insurance package that works with the Airbnb operation and is additional to their general insurance policy. This is also a good option because it keeps all general insurance under the one umberella! As this insurance cover is new, I have not been able to find any details of it as yet but will post as an update when I can secure!
There is also another company who provide similar cover to the hosting community for an annual modest premium which is more for hosts with a full booking calendar. I believe this company is called LTM Risk Partners and is based in Western Australia and appears to be most active in Melbourne and Sydney.
All these companies provide either $10m or $20m public liability insurance but be aware that there are some traps where liability insurance is concerned!
Liability insurance will only cover guests and hosts on the insured property, and does not cover guests from their own negligence. If you allow guests to use bicycles that you may provide for them to cycle the local area there is no automatic liability cover beyond the perimeter of the insured property! If they injure themselves diving from the top of the wardrobe cupboard onto the bed....they will, once again, not be covered!
I suggest to all hosts to check out all of these companies individually and compare what each has to offer and make a decision based on what comes from 'the horses mouth', rather than depending on what I have stated here. I have selected a company and coverage that suits my needs but those will vary from host to host.
But, forget about the Airbnb's host protection scheme.....it is nothing more than a marketing tool and in reality provides no coverage for protection the average host would ever be likely to need!....cheers......Rob
Thank you @Robin4
I'm partially affected. I'm living in an old warehouse conversion which has a sturdy original structure, but very poor water-proof works which were done during the transforming into a residential building about 15 years ago.
However I'm just shocked these insurance companies got so fast response that they washed their hands in no time. Neither sympathy nor empathy is relevant to their business LOL
The thing people need to understand Yang is that Insurance is entirely based on an actuarial basis.....the premium must match the risk and when a premium is set it is based on the likelihood of an anticipated claim rate.
If for argument sake an earthquake suddenly hit Sydney .....and, oh God, I hope my feelings are wrong. There has been substantial seismic activity right around the rim of the Pacific plate. Volcanic activity and tremors have been experienced from New Zealand right up through Asia and South America and into Mexico. Here is the recent volcanic activity along the Pacific plate, and my feeling is that the San Andreas fault is going to experience a major quake in the next week. I so hope I am wrong but all the signs point to it! Unfortunately permission to upload the current data in the form of a screenshot has been denied....I get the red banner, which says...."Uploading seismic activity Pacific plate.png resulted in the following error: Permission Denied". That is the first time I have ever seen that with a screenshot, and that is frightening!
But as I said Yang, if an earthquake was to hit Sydney insurance companies would all instantly assess the scope of their coverage and put in place exclusions if they felt the risk would impact on the premium they had currently set!
So I can entirely understand how your insurance policy would reflect those amendments.
Hi everyone would like to know how everyone went with insurance is aami doing this for Airbnb or can you suggest an other company thanks Marama
Well Colin, you try to avail yourself of it! What is written on a bit of Airbnb advertising material and what is the reality of the scheme are two entirely different things.
The Host Protection scheme is not an insurance policy and if you are relying on it for your protection you are playing with fire!
It is an adjudicated scheme with so many clauses and exclusions and any benefit is at the discretion of whichever agent you may happen to be dealing with.
Colin I would not on these pages promote the HPS because too many have, it lulls newer users into feeling they do not need any other sort of protection and keep on believing that their backs are covered until they are let down by it.
If a payout is offered at all some will be down to 5% of what is claimed.
Don't bypass putting a proper insurance protection in place where you pay a premium and are issued a policy to cover defined risks.
Hi everyone thanks for this informative thread. So is the conclusion that nrma coupled with share cover is the way to go if you’re also living on premises whilst airbnbing?
I'm going through this right now... I hadn't realised through AAMI (building insurance) that I wasn't actually covered since I had Airbnb guests occasionally in a studio downstairs. (I live in the property) also because I live in the property and rent out a room my general insurance is changed from owner to owner and tenant adding yet another $300 to my policy which is way more expensive than AAMI to start with. NRMA will cover at great expense and then require you to use Sharecover as an addition. I'm trying to get a quote right now but their site won't work. There of course is no phone number! What a mine field. I only rent out on weekends and it's becoming a pain!!!
I have been hosting for 21/2 years. When setting up our property for Airbnb hosting I found the biggest hurdle was finding the correct insurance cover. After endless phone calls I found the perfect policy for short term rentals. If you aren't satisfied with your current insurance I strongly suggest you give these people a call. We also needed cover for our own private use of the property and none of the many insurers I rang could give suitable cover for both. This is an insurance broker who saw the gap in the market and together with the insurer they designed their own policy specifically for these needs. We went in and spoke to them personally to make sure all our needs were addressed and they are great to deal with and also reasonably priced. If you only need cover for rental side then they can provide this too. Our package is called Landlord Package. Details are:
BJS Insurance Brokers(Gippsland)P/L
Tel: 035671 3600