Will my house insurance cover renting out my home through “short-term rental” agencies?

Listing your home for rent on sites like Airbnb can be a great way to earn extra income. If you’re thinking about doing this, it is important to know exactly what your insurance covers and what extra cover you might need to protect your property.

For example, one of the major agencies provides an automatic cover for all listed properties, called “host liability insurance”. The policy covers some situations where you might otherwise be legally responsible. For example, some guest injuries and damage to, or theft of, guest belongings.

However, there are many situations that are not covered by these agencies. For example, the automatic policy does not cover intentional damage or injury, or damage to your own property or belongings. The policy also excludes damage that happens outside of a guest’s booking, for example if a guest overstays their welcome and causes damage.

If damage does occur, you must make a claim within the specified period indicated by the agency, in relation to the damage, for it to be covered by them. Most agency websites also require you to first make a claim through your personal insurer.

It is important to note that the cover provided by the agencies themselves is not an insurance policy and is not regulated by New Zealand’s Financial Market Authority. If you are planning to rent out your property to temporary guests, it is a good idea to check with your insurer about taking out extra cover as a precaution.  

Most insurance policies cover accidental damage that has been caused by any person invited onto your property, which includes temporary guests of the agency. However, it is important to note that it is unlikely that your house insurance policy covers intentional damage, at least without the need to pay extra on your excess.

It is also important to note that the regularity of you hosting may affect your cover. Usually, standard house and contents insurance will cover a short term one-off rental situation.

Some insurance policies exclude guests altogether, and hosting through such agencies may be a breach of your insurance policy. If in doubt, it is best to contact your insurance provider for that confirmation.

It is important that you check what your insurance policy covers, and notify your insurer if you are planning on hosting guests through reputable short-term rental sites. If you are confused about what is in your insurance policy, it pays to seek advice from a professional with experience in the area.

Leading law firms committed to helping clients cost-effectively will have a range of fixed-price Initial Consultations to suit most people’s needs in quickly learning what their options are.  At Rainey Collins we have an experienced team who can answer your questions and put you on the right track.

Shaun Cousins and Hunter Flanagan-Connors