When it comes to property insurance, there is a dizzying array of options available. Most direct insurers have landlord and home-owner products, and you can buy many of them from the insurer online. However if you are letting your property on the short stay market, that is not the case. Most short stay insurance products are only available through brokers, and the options are very limited.
So, you have done the right thing and insured your short stay property. You could be expected to believe that no ill can now befall you, and that your property is protected against every conceivable scenario. Not so. Depending on the policy and the insurer, there may be areas of exposure. It's important that you understand not only what the cover includes, but also what it excludes.
What's generally not covered
It may surprise property owners that some of the scenarios below are not generally claimable under most policies, regardless of who the insurer is. Some common exclusions are:
Accidental Damage will not be covered unless the policy specifically notes it. Not sure what kind of cover you have? Learn more here...
Damage arising from lack of maintenance
General cleaning costs*
Wear & tear
Scratching & denting of surfaces
Insect infestations (in short stay scenarios, bedbugs are a common landlord concern)
Not all insurance policies will cover pet damage
Theft is sometimes an optional cover, not built in. Check your policy
Rent Default or Loss of Rent may be an optional extra, or not offered at all
Your short stay property will not be covered for guest-related damage or public liability if you only have a standard landlord’s policy rather than a policy designed for short stay activity
Your primary residence will not be covered for guest risk unless the policy notes short stay occupancy, and failure to declare this to the insurer may result in a claim being declined or your insurance being terminated
*If you are a short stay operator, the dreaded "party house" scenario may leave you seriously out of pocket if there are mountains of rubbish to remove and you have to call in a swat team of professional cleaners. Some policies do cover drug lab clean-up which is a rising problem. As this is a bio-hazard scenario, specialist cleaning is required.
Best to try to avoid the problem guests in the first place. Tips for avoiding problem guests
Some claims may be subject to an extra excess
Everyone should be familiar with the concept of Excess, which is the amount you need to pay out of pocket in the event of a claim. Usually, the policy-holder can nominate the level of excess at the time of setting up the policy. The rule is, the higher the excess, the lower the premium and vice versa.
Examples of where an extra excess may apply:
In cases of Accidental, Malicious or Intentional Damage, an extra excess of $400 or more may apply. What's the difference between these 3 types of damage? Learn more here
In the event of an earthquake or tsunami, there is nearly always an extra excess to pay. $200 is common
Insurance should not be regarded as a magic bullet, and risk management should always be exercised to mitigate or prevent claims in the first place. Frequent small claims should be avoided, as they create an adverse claims history that may work against you when seeking insurance, and may result in increased premiums at renewal.
This information is general advice only, please consider the PDS.
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Need to know more? Contact Ceneta Insurance Services
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