1. Why standard home and landlord policies often exclude Airbnb

A home and contents policy is priced for the people who live in the home. A landlord policy is usually priced for one tenant on a lease. Short stays are different. Guests change every few nights, they do not know the property, and the home is being used to earn income.

Because of that, many standard policies exclude paying short-stay guests, or only cover them if you declared the use when you took out the policy. If you list on Airbnb without telling your insurer, a claim for guest damage or a guest injury can be refused.

The first step is simple. Read your current policy wording for words like short stay, holiday letting or paying guests, and ask your insurer in writing whether short stays are covered.

2. What AirCover for Hosts covers and what it leaves out

Every Airbnb booking comes with AirCover for Hosts. It has two main parts:

• Host damage protection: help with costs of up to US$3 million when guests damage your home or belongings.
• Host liability insurance: US$1 million of cover if a guest is hurt or their belongings are damaged or stolen.

It is useful, but it has limits that matter for Australian hosts:

• Airbnb bookings only. Stays booked through Booking.com, Stayz or directly are not covered by AirCover.
• Guest damage only. It is built around damage caused by guests during a stay. It is not building insurance, so fire, storm and flood still need their own cover.
• Terms and exclusions apply. Airbnb publishes the full terms and the exclusions, so read them before you rely on it.

If you list on more than one platform, which most managed properties do, AirCover on its own leaves gaps.

3. The cover a short-stay host needs

A specialist short-stay or holiday rental policy usually brings these together. Check each one is in the policy you choose.

3.1 Public liability

This covers you if a guest or visitor is injured at the property and holds you responsible. It is the cover that NSW requires for short stays, and the one with the biggest potential claims.

3.2 Building and contents

Building cover protects the structure against events like fire and storm. Contents cover protects your furniture, appliances and linen. Make sure both accept short-stay use, and check how theft and malicious damage by guests are treated.

3.3 Loss of rental income

If an insured event such as a fire stops you taking bookings, this pays back some of the income you lose while the property is repaired. For a property that earns most of its money over summer, that can be a large sum.

3.4 Accidental and malicious guest damage

Some policies separate accidental damage from deliberate damage, and some cap the amount for each. Check both, along with any excess that applies to each claim.

4. State rules and strata

4.1 NSW requires liability cover

Under the NSW short-term rental accommodation rules, hosts must hold insurance that covers their liability for injury or death of third parties on the premises, valid for each stay. Airbnb states that its host liability insurance meets the minimum standard in the NSW Code of Conduct, but that only applies to stays booked through Airbnb. For direct or other platform bookings, you need your own policy. Our guide to the NSW registration and 180-night rules covers the rest of what NSW hosts must do.

4.2 Other states

Rules on registration, night limits and levies differ from state to state. Our overview of short-stay caps and rules across Australia sets out where you can let year round. Whatever the state, your insurer needs to know the property is used for short stays.

4.3 Strata buildings

If your property is an apartment, strata by-laws may restrict short stays, and the owners corporation insures the building. Check the by-laws, tell the strata manager how the lot is used, and make sure your own policy covers your contents and liability inside the lot.

5. How to choose a policy

Per-night or annual

Some short-stay insurers sell cover by the night, which suits a home let now and then. A property let most of the year is usually better on an annual policy written for short stays.

Questions to ask before you buy

• Does the policy cover bookings from every platform you use, and direct bookings?
• How much public liability cover is included?
• Are theft and malicious damage by guests covered, and is there a separate limit?
• Is loss of rental income included, and for how long?
• What is the excess on each type of claim?

How a manager helps

A good manager screens guests, collects damage deposits where the platform allows, records the condition of the property between stays and handles AirCover claims. That reduces the claims you make on your own policy. Houst charges from 14% of booking income outside London, Paris and Dubai, with no setup fee. See the Airbnb management in Australia page, our guide to Airbnb hosting fees in Australia, or what a Sydney Airbnb can earn once costs like insurance are in.

This article is general information, not insurance or financial advice. Policy terms vary, so read the product disclosure statement and speak to a broker before you buy.