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Suzanne Colson: Short-term tenants and insurance

Tuesday, August 14, 2018

If you plan on renting out a room or your house to short-term tenants, there are some things you need to consider. One of the most important is how it will affect your insurance cover.


Failing to tell your insurance company about the change in occupancy could result in non-disclosure; which in turn could result in non-payment of a claim. Make sure you let your insurer know if you intend to rent a room or home to short-term tenants or guests. A house, rental or landlord insurance policy designed for long-term tenants is unlikely to cover you.

Getting the right cover

Just because you’ve got insurance, and you have disclosed the occupancy, it doesn't mean that you are covered. You will need to specifically ask your insurer about policy coverage whilst short-term tenants / guests are staying in your home. Some of the key questions to ask are:

  • Any cover for damage/theft by short-term holiday rental guests?
  • Is there a cover for lost rental income following a damage to the property?
  • Will there be cover if guests contaminate the home with methamphetamine?

Simply continuing to insure the home isn't always enough. You want to make sure that you have the right insurance cover for the increased risk exposure. If your existing insurer cannot provide this cover check out initio.co.nz who specialises in rental and holiday home insurance. APIA members receive a discount.

If your home or unit is used solely for short-term tenants it is unlikely to meet the EQC (Earthquake Commission) definition of a home. This is because it is viewed as more like a motel, and will require a commercial insurance policy.

Don't rely on Airbnb Host Guarantee

The Host Guarantee is not an insurance policy, and should not be relied on as such. The extensive terms and conditions including time limitations can make receiving a payment from Airbnb difficult. There are no guarantees of payment with this guarantee. The security deposit paid by guests is also controlled by Airbnb so unless Airbnb and the guest agree, you cannot retain any security deposits to cover your damage.

How to stay safe

If you do decide to list your home (or room) online with sites such as Airbnb or Bookabach there are some simple ways to stay safe.

  • Screen guests by checking online reviews and looking at online profiles such as Facebook and LinkedIn. Don't be afraid to ask for references, and remember you can decline a booking if you are not comfortable.
  • Don't go off the platform, and complete the transaction offline, this will void any 'guarantees' offered by Airbnb. Always be wary of guests wanting to pay with prezzy cards or cash.
  • Question guests intentions if they are wanting to stay for extended periods at short notice; especially if it is off season and your home is in a remote location.
  • Always refund cancellations to the credit card used to make the payment to avoid assisting money launderers.
  • Don't leave valuable or sentimental items lying around for guests to use or damage.
  • Consider installing a meth alarm.
  • Keep your keys safe by not always leaving them in the same place.
  • Build relationships with your neighbours so they can keep an eye on the home and report any suspicious behaviour.



Suzanne Colson


Suzanne has been with Initio since the beginning. Having previously worked as a senior underwriter and insurance broker, she brings a wealth of knowledge with over 15 of years insurance experience to the Initio team. She has a passion for ensuring clients are well supported and provided with a great products. 







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