Turning your holiday home into a holiday rental can be rewarding for everyone involved, so it’s not surprising that from 2016 to 2022, around 500,000 Australian hosts listed their properties on short-term rental platforms.1
If you’re considering renting out your holiday house, think of it this way - you get to share your place with others while earning an income at the same time. That income could help you with costs such as rates, insurance or your mortgage. And for holidaymakers, it means being able to rest and rejuvenate in a unique space that often offers all the conveniences and luxuries of home.
But among all the positives, whether you’re the host or the guest, you might wonder what happens if something gets damaged, such as a broken glass, a smashed window or red wine spilled all over a white couch.
If the property is listed on a holiday rental booking platform, does that platform’s host damage protection step in or is it up to the guests to cover the cost? And what role might a host’s own holiday rental insurance play?
To kick things off, it can help to understand the differences between a few types of damage.
What types of holiday rental damage can occur?
It might be what’s called accidental damage – which is caused by an unexpected and non-deliberate action and might include accidentally spilled liquids staining a carpet or a broken window from a game of backyard cricket.2
Then there’s malicious damage, which happens out of ill will or spite and isn’t accidental – for example, when someone punches a hole in a wall.2
Deliberate or intentional damage, on the other hand, is done deliberately, but without malice or spite, often with the intent of “improving” something. An example would be installing picture hooks in walls without permission. This type of damage tends to be more common in longer-term rentals.2
Who is responsible for damages at an Airbnb property?
Dr Bill Swannie from Australian Catholic University’s Thomas More Law School in Melbourne says the question of responsibility for damage at a holiday rental depends on the terms of the agreement between the host and the guest.
“Sometimes these terms will be in a written agreement and sometimes they will be part of the terms of using a platform such as Airbnb or Stayz,” Dr Swannie says.
For example, Airbnb has some standard ground rules for guests and one of them is that you’re required to treat your host’s home like your own.3
As part of this rule, where a guest causes damage, they’re expected to let their host know about it as soon as possible and work with them to find a reasonable solution.3
If your host believes you’re responsible for the damage, they might send you a reimbursement request through Airbnb’s Resolution Centre. As a guest, you can either pay this or, if you don’t agree that you’re responsible, or disagree with the reimbursement amount being requested, you can submit an appeal.4
“Platforms such as Airbnb offer an informal resolution service to resolve disputes between guests and hosts,” says Dr Swannie. “Otherwise, a host or a guest could take legal action through a tribunal or court.”
Are Airbnb guests liable for accidental damages?
Dr Swannie says that, generally speaking, guests probably won’t be liable for accidental damage at a holiday rental. “Or for damage caused by ‘acts of nature’ such as an earthquake or storm,” he says.
“Guests are more likely to be liable for intentional and malicious damage. Accidental damage will generally be covered by the host damage protection provided by Airbnb.”
What if your belongings get damaged while you’re a guest at a holiday rental?
In situations where holiday rental platforms do cover damage to property or belongings, it generally doesn’t cover damage to guests’ property.5
To cover for this type of event, there are insurance options such as the Contents Accidental Loss or Damage cover you can add to a policy such as Youi’s Contents insurance. This is designed to cover your belongings against accidental loss or damage no matter where you take them.6
Won’t I be covered by my security deposit?
While some holiday rental platforms, including Stayz7 and A Perfect Stay,8 do require guests to pay a security deposit in addition to payment for the accommodation, Airbnb hosts can’t usually charge a security deposit.9
Instead, Airbnb lets guests know when they’re booking that if they cause damage during their stay, their payment method may be charged if their host requests reimbursement through the platform’s Resolution Centre and it’s determined that the guest was responsible for the damage.9
How to file a damage claim with Airbnb
If you’re an Airbnb host and your home or furnishings are damaged during a guest’s stay, you may be covered under AirCover.10
The first thing to do is start a reimbursement request.10 “Incidents of property or belongings being damaged on Airbnb are rare, but we provide support to the hosts if it does occur,” an Airbnb spokesperson says.
For example, AirCover’s host damage protection should cover you if a guest, or one of their guests, damages your home, furnishings or valuables or a boat or vehicle that you’ve parked outside. It also covers extra cleaning costs to remove stains left by guests or their pets, and lost income if a guest causes damage which means you have to cancel your next Airbnb booking.10
Some of the things it doesn’t cover include loss during a guest’s stay caused by acts of nature,10 such as an earthquake, flood or storm.
Can landlord insurance cover a holiday rental?
A holiday rental platform’s insurance may not necessarily be enough to adequately protect your holiday home once you’ve listed it.1
As well as not including cover against loss caused by acts of nature,10 when host damage insurance is offered by holiday rental platforms, it only protects your property while you’re hosting a stay.11
It’s just one reason why some hosts consider taking out suitable home insurance. If you’d like to explore your holiday home insurance options with Youi, it’s easy to start a quote online.
1 Source: Insurance Council of Australia – Short-term holiday rental hosts warned not to risk being uninsured, April 2022
2 Source: realestate.com.au – Landlords: How to handle property damage, April 2018
3 Source: Airbnb – Ground rules for guests
4 Source: Airbnb – Host liability insurance
5 Source: Airbnb – AirCover for guests
6 Exclusions, limits and additional fees may apply. See the Home & Contents PDS for full details.
7 Source: Stayz – Trust & Safety
8 Source: A Perfect Stay – FAQ’s
9 Source: Airbnb – Security deposits
10 Source: Airbnb – Host damage protection
11 Source: Airbnb – AirCover for hosts
