The arrival of summer inevitably leads to increased demand for short-term holiday letting properties throughout the Illawarra.
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There are currently 213 Illawarra properties listed on the HomeAway (formerly known as Stayz) online platform.
However, a representative body for the insurance industry says householders and investors who list their houses and apartments on short-stay rental websites over the summer holidays could potentially be putting their assets and financial stability at risk.
Lisa Kable, spokesperson for the Insurance Council of Australia’s Understand Insurance initiative, said householders who offer their houses or apartments on short-term holiday rental websites are likely to find they are not protected by home and contents insurance.
She said owners may not realise that most insurers regard short-stay holiday rental as a commercial use of the property because the likelihood something will go wrong is higher.
“A home building or contents claim incurred while a property is being rented out may be declined, leaving the owner financially vulnerable to financial loss and other liabilities,” she said.
A HomeAway spokesperson said they “advise all our homeowners that list on HomeAway to check with their insurance company to see whether they are covered for short-term holiday rentals”.
Greg Channer is managing director of Emerald & Aqua, a boutique agency managing holiday accommodation from Stanwell Park to Shellharbour.
He said it could be difficult for landlords to engage with the major platforms if there was an issue with guests on a short-term stay.
He said the rise of click-and-book websites meant landlords are often not speaking with guests one-on-one, opening up the doors for “party houses and damage to properties”.
“Insurance coverage is becoming more relied upon as the industry moves towards greater automation,” he said.
“(This is) removing personal contact and as such global platforms are actively pushing ‘instant booking’, which penalises landlords and agencies from speaking with the prospective guests, which in parallel has seen a rise in party houses and damage to properties.
“Our observations from our own experience and that of our clients (landlords) is that a very prominent global platform that offers their own insurance product does not provide adequate cover, is hard to access to make claims and is not reflective of the needs of landlords.
“Also, our understanding is those landlords who opt to self-manage, if their property is let for less than three months per year and isn’t professionally managed, many insurers won’t insure the property.”
Mr Channer offered the following suggestions for current and prospective landlords looking to list their properties on short-term stay platforms:
*Seek professional advice from your provider or insurance broker.
*Check your home and building insurance.
*Discuss with your existing provider if short-term letting is covered, and if not can you extend coverage on existing building insurance.
*If your existing provider does not have a policy available you will need to seek an additional policy on top of your existing building policy.
*Ensure that you sign up with a smoke alarm inspection and management company.