Short-term accommodation websites or peer-to-peer e-leasing sites, such as AirBnB and Roomorama, may leave renters uninsured the Insurance Council of Australia
Short-term leasing sites have been hailed as a great way to earn money and meet people from all over the world, but if consumers fail to check their insurance documents they could be in line for a lot more than they bargained for.
CEO of ICA, Rob Whelan, warned homeowners and renters that they could be opening up their homes to huge financial losses thanks to e-leasing sites.
“It is essential that homeowners or tenants who consider using online house-sharing services discuss this with their insurer beforehand, and check how this could impact their home and contents insurance, strata or renter’s insurance policies,” Whelan said.
“Anyone thinking about renting a room or part of their home should know that they might not be covered for property damage and other losses that could happen as a result of renting it out to holidaymakers. Importantly, they may not be covered for public liability should a paying guest be injured on the premises.
"Many insurers regard online holiday rentals as a business activity. Policyholders should check whether their insurance covers these activities and whether a more appropriate form of policy, such as landlord’s insurance, is required. Some insurers offer policies designed for short-term holiday letting."
E-leasing sites offer a similar kind of insurance conundrum to ride-sharing sites such as Uber with one advisor, Matthew Dawe from Loop Insurance an AR of Westcourt, detailing the problems consumers face when securing home insurance with e-leasing in mind and offered alternative insurance options.
“Whilst most home insurers will not extend their current policies to cover the business use of the property, there are a number of specialist underwriting agencies available who will consider cover for both the home and contents and the liability exposure, rating it as a bed and breakfast style accommodation.”
“I believe there is a need in our current market for a specialised product for this style of accommodation.
“As per your Duty of Disclosure, I would advise anyone looking at renting out a room through one of these websites to disclose this to their existing home and contents insurer immediately. They may find that their existing insurer will agree to cover them. However if they don’t, I would recommend they contact a broker immediately to help arrange a more suitable insurance program.”
Many e-leasing sites offer their own version of coverage but Whelan warned that these agreements aren’t as dependable as insurance options.
"The guarantees offered by some peer-to-peer accommodation providers don’t cover items such as cash, or pets, or even personal liability in shared areas, and it is highly uncertain whether the householder’s or traveller’s insurance will cover these areas under this specific type of agreements."