11 Nov Holiday Home Headaches
It might seem like a good idea to rent out your holiday house or turn your home into an Airbnb destination, but it is vital to ensure that your insurer knows about your plans well in advance to confirm that you remain covered. It may also require changes to your existing policy, such as adding public liability cover.
Bennie Boshoff, GM of Safire Short-term Division, says, “We need to be informed of any changes to the use of your property. While Airbnb may offer certain insurance protection, this is limited. Not only is your home a major asset, you also need to be protected if something happens to a guest or someone renting your home.”
Sadly, those renting your home may not take as much care with your home and its contents as you would! This increases the Insurer’s risk, which may lead to an issue surrounding non-disclosure should a claim occur.
Please consider the following:
- General exceptions – minor scratching, denting, chipping of contents such as furniture and damage by domestic pets (if you intend allowing pets) would not be covered.
- Theft – Houseowners / Householders – cover for theft is subject to there being visible forcible and violent entry into / exit from the property;
- Malicious damage may also not be covered as the risk of letting strangers use your property could be a contributing factor;
- The terms and conditions which the Insured agrees to by renting / letting should not be in contravention of the policy wording.
In addition to not covering theft without evidence of forcible and/or violent entry/exit, and malicious damage, the Insurer would most likely not pay claims in the following circumstances:
- Accidental damage to mirrors, glass and other contents as these are not under the insured’s custody and control;
- Costs associated with replacing locks and keys, should guests not return the keys;
- Medical expenses to any guests (hence the need for public liability);
- Property belonging to the guests: although policy wording does cater for this, the intention is to cover temporary guests residing with you, not renting from you.
Examples of losses that might arise from the actions of renting ‘guests’, may include:
- Using certain household items in contradiction with their intended use (ie. not taking due care to prevent the loss);
- Accidental damage to certain fragile items (not taking due care to prevent the loss)
“It pays to reassess your cover when you intend renting out your property,” says Bennie. “A little effort beforehand can save you a lot of headaches later on, so please contact your Safire-approved broker to discuss your changing insurance needs.”