Insurance warning for AirBNB hosts

AirBNB and Insurance: A match made in hell?

AirBNB has been a hot-topic for Owners Corporations and their members  with apartment owners and occupiers concerned about the nature of short-term leases and their effects on the buildings in which they occur.

The Victorian government is trying to find the right balance between allowing property owners the freedom to use their property as they see fit, while protecting the rights of neighbours and other building occupants and the peace and harmony of their property.

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For Owners Corporations, the hidden cost of AirBNB-style leases comes in the form of increased wear and tear on building assets, potential compromising of security and in the worst cases the repair of broken property in common areas.

With no common register, even monitoring AirBNB use is difficult for Owners Corporations.

But how does AirBNB affect your property’s insurance?

No disclosure? No forced entry? You might have no cover

When entering into an insurance contract, you are required to disclose any change to your circumstances to your insurer. That means if you signed up to contents insurance and didn’t disclose your plans to use your property for AirBNB or similar short-term leasing, then any claims for resulting damages may be denied.

If there is no evidence of forced entry, your claim may also be denied. Most policies require clear evidence of “breaking and entering” to respond, which obviously would not apply if you are willingly handing your keys out to people.

Insurers may also perceive short-term letting as carrying out a business activity in your home which may also void your cover. Domestic content insurance policies cover your home, not your business.

So, if you are interested in leasing your property out in AirBNB, make sure you check your policy and disclose this information to your insurer and check in with Strata Plan to ensure your Owners Corporation’s cover will protect you and your fellow owners from short-term lease risks.

This article is not intended to be advice and you should not rely on it as a substitute for any form of advice. For more information, contact Strata Plan on 1300 278 728 or contact your insurer directly.

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