ICA issues reminder for homeowners planning to lease properties for holidays

The Insurance Council of Australia (ICA) has emphasised the importance for homeowners planning to lease their properties during the summer holidays to ensure they possess appropriate insurance coverage.

The ICA noted that standard home and contents insurance often excludes coverage for short-term rentals, necessitating the consideration of specialised holiday rental insurance.

Tailored for properties rented out briefly, such as holiday homes or residences listed temporarily on platforms like Airbnb, holiday rental insurance serves as a safeguard against potential financial losses. These losses could result from scenarios like accidental property damage, theft of belongings, or liability claims from guests.

How to choose a holiday rental insurance policy

The ICA advised homeowners to meticulously review policy terms to grasp inclusions and exclusions when selecting a holiday rental insurance policy. Those contemplating renting out their properties for the holidays must:

• scrutinise building and contents insurance policy details before listing on short-stay holiday rental platforms. If the existing policy lacks coverage for short-term rentals, explore specialty policies that provide protection for both the home and its contents while paying guests are in residence;
• recognise that the host protection insurance offered by rental platforms might not cover all anticipated damages;
• mitigate the risk of theft by temporarily removing valuables during the short-term stay; and
• verify strata rules, tenancy agreements, and local council regulations, as they might impose restrictions on short-stay holiday rentals.

“Embracing short-term rental opportunities can be worthwhile for homeowners, but proper preparation and insurance coverage are essential to mitigate potential risks,” said ICA CEO Andrew Hall. “Before welcoming visitors to stay in your home, talk to your insurer about what is and isn’t covered, and consider specialised coverage for peace of mind.”

In other news, the ICA called for greater investment by governments at all levels after finding a concerning number of properties exposed to high flood risk.