after party messHoliday, celebrate?

A recent survey found damage to holiday homes by guests was commonplace, so having the right landlord insurance is a necessity.

When a general insurer surveyed 1,000 holiday home tenants, some concerning statistics came to light – and put a spotlight on the need for the right insurance.

It was found:

  • one in six tenants (17 per cent) had accidently broken something or damaged their accommodation
  • one in seven (14 per cent) had been injured at the property
  • one in five (19 per cent) had hosted or been to a party at a holiday rental
  • young men aged 18 to 34 were more likely to damage a property (24 per cent, compared to 17 per cent of women), injure themselves or host a party (35 per cent, compared to 19 per cent of women)

The findings show that the unexpected does happen from time to time – and that it’s important to have the right insurance in place when it does.

Too often owners do not realise that their normal home and contents insurance, landlord insurance or the insurance offered by some platforms may not cover them for damage or liability caused by a paying guest.

Any owner renting out their property short-term – as a standard holiday let or through a share accommodation platform like Airbnb or Stayz – should take out a landlord insurance policy designed for the short-term market.

In addition to providing cover for damage to the building (if applicable), RentCoverShortTerm offers comprehensive contents cover for items including game consoles, entertainment equipment, linen, crockery and cookware. It also covers damage caused by tenants, their pets or guests, whether the damage is accidental or malicious (accidental, deliberate/intentional or malicious damage is excluded in many other policies, as is pet damage). Unlike a number of policies on the market, RentCoverShortTerm does not exclude damage claims resulting from the tenants having a party (subject to normal policy exclusions). Importantly, it also provides up to $20 million in liability costs in case a tenant/guest is injured on the property. RentCoverShortTerm is available for corporate leases, holiday home lets and Airbnb/other share accommodation platform rentals.

For these landlords, having the right short-term accommodation insurance policy in place saved them thousands.

Claim 1: stoners wreak havoc
A guest was staying at the property for two nights. On the day of departure, the PM arrived and found three people smoking marijuana and meth. The police were called to the property and escorted the drug-affected people from the premises. When a full inspection was carried out, there was extensive damage to the property with broken windows, burn marks on carpets and surfaces, beds broken, and linen and other contents missing or heavily stained. The $8,500 damage claim was paid.

Claim 2: washing in high heels proves perilous
A guest went to hang out washing on the line. The path to the washing line was old railway sleepers embedded in the ground and one of these was apparently uneven. The guest was wearing high heels at the time and lost their balance and ended up breaking an ankle. The $15,000 claim for the guest’s medical costs and lost earnings was paid.

Damage and liability are key considerations for short-term landlords and their agents, but loss of rent should also be factored in. It is likely that only a landlord policy specifically designed for short-term leasing will cover the cost of lost rent.

Claim 3: break-in causes guest to vacate and take the rental income with them
A property was being rented through Airbnb when an attempted break-in resulted in a broken window. Due to safety and security concerns, the guest and owner were advised by Airbnb that the guest would have to vacate. The $250 damage bill was paid in addition to $700 in lost income due to the cancelled booking.

Claim 4: burst water system bursts owner’s short-term rental plans
The hot water converter in a unit above the policyholder’s burst, damaging the building. While the owner did not have building cover with us, they did have cover for contents and loss of rent. The $3,500 claim for loss of rent, due to the property being unlettable during repairs and some bookings having to be cancelled, was paid.

These claims illustrate the value in having the right short-term insurance policy in place – one that covers the property, its contents, the owners’ liability, any loss of rent and how the property will be let (that is, through a standard holiday let arrangement, via a platform like Airbnb or a mix). Without cover in place, a holiday rental could go from being a ‘nice little earner’ to a financial nightmare.