Holiday home insurance – choosing the right policy

Holiday home insurance

Holiday home insurance – choosing the right policy

If you're considering renting out your holiday home on platforms like Airbnb, you might be questioning how to safeguard it with insurance. Are standard home and contents policies adequate, or do you require something more tailored? Keep reading to find out.

In the latter part of last year, the Real Estate Institute of Australia (REIA) conducted an analysis and discovered that in the March 2023 quarter, there were a total of 133,968 'short-stay' accommodation listings in Australia. The findings from the Short Stay Accommodation Study revealed a significant surge of 22.8 percent in the number of 'short-stay' properties nationwide over the course of the year. This upward trend suggests a growing inclination among property owners to engage in this market.

If you're among the ranks of 'short-stay' landlords, or considering joining them, safeguarding your investment with the appropriate insurance is paramount.

Before delving into the specifics of insurance, let's clarify what we mean by a 'short-stay' (or short-term) landlord. If you're a property owner who makes their investment property or holiday home available on a platform for durations ranging from one day to six months, then you fall under the category of a 'short-stay' landlord.

That sorted, back to the insurance matter.

As a 'short-stay' landlord, it's crucial to obtain insurance coverage to provide financial protection against a variety of key risks, including:

Let's delve deeper into each of these areas so you can gain a comprehensive understanding of what you need to consider when comparing insurance coverage options...

Damage caused by severe weather and other events:

Some insurance providers may not include protection for the property against events unrelated to hosting. If you opt for a policy that excludes this coverage and your property sustains damage from a natural disaster, you may need to rely on your home and contents (or similar) policy for coverage against insured events. However, it's essential to note that you can only make a claim if your insurer offers coverage for properties being used for 'short-stay' rentals. Many standard home and contents policies contain exclusions related to using the property for income-generating purposes or other specific exclusions.


An insurance provider might provide theft cover only if it applies to theft by the guests or their invitees. In many cases, there's no coverage for third-party theft, such as burglary. Therefore, if your property is unoccupied between hosting periods and you lack the appropriate coverage, you could face financial loss if your home is burglarized.

Loss of rent:

Many insurance providers offer lost income cover if a host needs to cancel confirmed bookings due to damage caused by a guest or their invitees. However, coverage may be limited to these specific circumstances. In instances where a property becomes uninhabitable due to events like natural disasters, such as a cyclone, and confirmed bookings cannot proceed, you may not be able to recoup lost income without the appropriate insurance coverage in place.

Legal liability:

Most policies should include liability cover, which is arguably one of the most crucial features of a landlord insurance policy, as claims for this type of event can escalate into the tens of millions of dollars. Liability insurance typically protects the host if they are found legally responsible for bodily injury to a guest or others. When searching for coverage for a holiday home, the policy ideally should provide cover if a guest or another individual dies as a result of liability, and it should be in effect even when there are no guests present. Why is this important? Consider a scenario where someone needs to access the property between guest stays and is seriously injured due to a property fault. If the landlord is at fault, the injured person can file a claim for damages. With the right type of cover, the landlord can rely on their insurance to handle such situations.

Given the limitations of cover offered by certain providers, short-stay landlords would be wise to protect their investment by securing specialised landlord insurance that is tailored to the short-term market.

Contact us for any type of real estate information.