Guests behaving badly: Can you protect your short-term rental from damage?

Short-term property rentals have taken a back seat during Covid-19 because of travel restrictions. But, with protocols currently relaxed, a return to big events and the Easter holiday period around the corner, short-term rental property owners are now likely to experience a significant uptick in bookings. The City of Cape Town recently reported that data from Cape Town International Airport shows a major increase in international travellers coming to the country, processing about 25 000 passengers a day.

But, if you are lucky enough to have an investment property or a holiday home that you rent out via hosting platforms like Airbnb, then you may also know the headaches that come with having many feet through the doors, like damage to, or theft of your property and goods.

Tarina Vlok, MD at Elite Risk Acceptances, a high-net-worth insurer and subsidiary of Old Mutual Insure, says that renting out an investment property on a short-term basis comes with many risks to homeowners.

“It is not uncommon to hear about losses and personal financial setbacks that occur as a result of short-term rental arrangements. Anything from damage to furniture from pets, through to injuries to people staying on the property as a result of faulty goods, so it is best that homeowners plan to deal with these,” explains Tarina Vlok, MD.

In response to the many complaints from property owners, Airbnb recently announced free top-to-bottom protection for every host against risks from guests behaving badly.

“Many of these third-party platforms, who may be internationally owned and run, claim to offer protection or cover against pets damaging your holiday property, or even if a guest breaks something,” says Vlok. “If you are hiring out your property through Airbnb, familiarise yourself with their exclusions as listed on the site. Airbnb Aircover has many exclusions and is not meant to replace your personal insurance.”

She says if you are property owner, it is important to check whether you have cover that protects you from being held liable for accidents or injuries that happened on the property.

“Oftentimes specialist insurers will offer comprehensive insurance to policyholders, but you do need to indicate to your insurer what the property will be used for.”