Insurance quandary for Airbnb hosts
With an estimated 40,000 Australian homes up for rent on Airbnb – plus more on other sites like HomeAway, VRBO, HotelTonight, FlipKey and VacationRentals – peer-to-peer house sharing and online letting services is a growing rental sector.
While the vast majority of rentals facilitated through these sites go off without a hitch, what happens when things do go wrong?
A recent incident in the US raises questions about what would happen in Australia if a person died or was seriously injured at an Airbnb rental.
The US case involved the Stone family who rented a cottage in Texas that had a rope swing out the back. One morning the grandfather decided to have a go on the swing, the trunk the rope was tied to broke in half and he fell on his head, ending his life.
While the homeowners’ insurance company settled the claim, this is an exception and not the rule, as many policies have exclusions for commercial activity taking place at the premises, such as making money from renting through Airbnb.
If the same incident had occurred in Australia, both the homeowner and Airbnb could have been sued.
Airbnb, however, disclaim any liability for accidents.
So, does a homeowner’s home and contents insurance provide cover?
Conditions vary widely from insurer to insurer but many regard short-term lettings as commercial use, which can render the policy void.
And, while Airbnb has ‘Host Guarantee’ cover for property damage up to AUD1 million, the guarantee is not an insurance policy and does not cover public liability.
So, if a person was injured or killed on the property, it’s the responsibility of the homeowner to be adequately insured.
The bottom-line? If you’re contemplating renting out your home through services like Airbnb, make sure you or your visitors are adequately insured. It’s also important to advise your insurer (in accordance with the Insurance Contracts Act 1984), if you change your circumstances, like deciding to rent out a property, as failure to do so can nullify any policy.