Do I Need Landlord Insurance for Airbnb?

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As a landlord or property investor in Australia, you may be tempted to rent your property out on Airbnb. With the rise of short-term rental platforms, earning extra income from your investment property is easier than ever. 

However, before you start welcoming guests, we recommend looking into whether you need landlord insurance for your Airbnb rental. Additionally, understanding the benefits and importance of Airbnb insurance for hosts in Australia ensures you know exactly what you’re protected against if something happens to go amiss. 

Landlord insurance is one of your options here. Equally important is short-term rental insurance, which offers protection specifically designed for the nuances of hosting on platforms like Airbnb and Stayz. This type of insurance is essential for hosts looking to safeguard their properties and income against the unique risks associated with short-term rentals.

What is Landlord Insurance?

Landlord insurance is a policy specifically designed for property owners who rent out their properties. It typically covers:

  • Property damage
  • Loss of rental income
  • Legal liability for tenant injuries, including legal liability cover to help cover potential legal costs in case of injury, death, or property damage to tenants or visitors.

Unlike regular home insurance, landlord insurance is tailored to the unique risks of renting out a property. This typically includes damage to or loss of the property’s buildings, such as the house, garages, and carports, due to weather events, unfortunate incidents like break-ins, and loss of rental income and legal liability. 

Note: We recommend always reading the Product Disclosure Statement for specifics on coverage limitations.

Risks of Renting on Airbnb Without Short-Term Rental Insurance

While Airbnb can be a great way to earn rental income, it also comes with some unique risks:

  • Property damage: Guests may accidentally or intentionally damage your property.
  • Liability issues: You could be held liable if a guest is injured on your property. Investing in host and general liability insurance can provide coverage for such incidents, with policies offering up to $3 million in protection. Note that AirCover by Airbnb does give hosts some protection through this, but it also depends on your circumstances and location. 
  • Loss of rental income: If your property is damaged and unfit for rental, you could lose valuable rental income.

Does Airbnb’s Host Guarantee Provide Enough Legal Liability Coverage?

As noted above, Airbnb offers a Host Guarantee that provides up to $3 million in property damage protection for hosts. However, there are some important limitations to keep in mind:

  • It doesn’t cover cash, pets, personal liability, or shared/common areas.
  • It’s not a substitute for landlord insurance.
  • Claims must be filed within 14 days of the guest’s checkout.

While the Host Guarantee can provide some peace of mind, it’s not a comprehensive insurance solution. Hosts should consider it part of their risk management strategy but not a substitute for insurance policies that might offer overlapping coverage, such as landlord or short-stay insurance, tailored to their specific needs.

Benefits of Landlord Insurance for Airbnb

Landlord insurance can provide a range of benefits for Airbnb hosts:

  • Comprehensive coverage: Landlord insurance can cover risks not included in Airbnb’s Host Guarantee, such as liability and loss of rental income.
  • Liability protection: If a guest sues you for an injury sustained on your property, landlord insurance can provide liability coverage, including host protection insurance designed for short-term rental situations.
  • Loss of rental income: If your property is damaged and unfit for rental, landlord insurance can cover the loss.
  • Accidental and malicious damage: Landlord insurance can cover both accidental and malicious damage caused by guests.
  • Theft by guests: If a guest steals your property, landlord insurance can provide coverage.

Some landlord insurance policies even cover shared/common areas, which are excluded from Airbnb’s Host Guarantee. Insurance cover through landlord insurance can provide peace of mind by protecting against a wide range of risks not covered by Airbnb’s Host Guarantee.

How Much Does Landlord Insurance Cost for Airbnbs?

The cost of landlord insurance varies based on factors like:

  • Property type
  • Location
  • Coverage limits
  • Deductible

On average, landlord insurance premiums are 25-35% higher than standard home insurance premiums. However, premiums are tax-deductible as a rental expense.

To get a tailored quote on a policy that’s right for you, click here.

Key Takeaways

  • While Airbnb’s Host Guarantee provides some protection for hosts, it’s not a substitute for comprehensive landlord insurance.
  • As a landlord or property investor, protecting your investment with the right insurance coverage is important.
    • Landlord insurance can provide a range of benefits for Airbnb hosts, including: Comprehensive coverage for property damage, liability, and loss of rental income.
    •  Protection for risks not covered by Airbnb’s Host Guarantee
    • Tax-deductible premiums
  • When shopping for landlord insurance, be sure to look for a policy that covers short-term rentals, provides adequate liability coverage, and includes coverage for loss of rental income.
  • By investing in the right landlord insurance policy, you can enjoy the benefits of renting on Airbnb with greater peace of mind.

Ready to get insured?

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