Insurer warns of AirBnB homeowner risks

Malicious damage caused by guests won't be covered by insurance. Photo / iStock

Thinking of renting out that spare room via AirBnB to earn a bit of spare cash?

You might want to check with your insurer.

Adam Heath who heads up the insurance products and underwriting business of Suncorp New Zealand, says most insurance policies should cover accidental damage caused by guests but malicious damage won't be covered.

"Services like AirBnB create an income for people and we want to support that but it does come with elements of risk."

Overseas some insurers won't cover people for Airbnb or people have to take out specialised cover.

Heath says that isn't the case here yet but people who intend to register for Airbnb should let their insurer know.

And there are plenty of other precautionary steps they can take to protect themselves.

Heath says the key is to read reviews of guests ahead of time and be selective.

"We would strongly encourage people to meet prospective occupants before they take up temporary occupancy."

There are other common sense steps people should take too.

"Secure all your valuables - lock jewellery in a safe and don't leave cash around."

If you have a valuable piece of artwork in the place where guests are staying either remove it or specify it on your insurance policy.

There are also health and safety risks to consider.

That could involve installing smoke alarms and just making sure appliances, wiring and heaters are safe.

Heath says businesses like Airbnb also offer the ability to take a security deposit which can be used to cover small breakages like a broken window or crockery.

If a guest injures themselves you could be liable. So think about how you are keeping your home or home environment safe.

Adam Heath

Small damages may be uneconomic to claim for if they are less than a person's insurance excess or would put a no-claim bonus at risk.

If you think you will have to make a claim Heath says it pays to check with Airbnb whether it could be covered under Airbnb's host guarantee first.

While its claim team has yet to come across an Airbnb related insurance claims Heath reminds that the point of having insurance is to provide a back up for the unexpected.

"You want to have a plan in place."

Five ways to protect yourself from invited guests:

Do your homework
Check guests' reviews and make sure you're only hosting guests with positive feedback ratings or that you're comfortable with. Meet with them before they move in.

Take care with your belongings
Secure all your valuables. Lock jewellery into a safe or other secure location, and don't leave cash lying around. If you've got expensive artwork, it could be worth storing it out of the way - but if you can't, make sure that it is listed on your insurance policy.

Take a security deposit
Through Airbnb, you can choose to take a security deposit from your guests to cover you in case of minor damage. For example, if your guest breaks a window or smashes some plates, you can take it out of their security deposit - which means you don't need to make a claim on your policy or pay an excess.

Keeping things ship-shape
When you host guests through Airbnb, make sure your home is safe. One of the best things you can do is install smoke alarms, and regularly check that they're working.

It's also a good idea to make sure you don't have any loose wiring, faulty appliances or dangerous or exposed heaters.

Host protection
Some accommodation sites offer guarantees or protection of their own, so it's a good idea to check what's available before listing your home. For example, Airbnb does offer a Host Guarantee to provide protection for damages - in New Zealand the guarantee is for up to $1.3 million.