Short-Stay Insurance in WA: What Standard Owner-Occupier and Landlord Policies Miss

Most owners come to short-stay holding one of two policies, and both typically exclude it.

• Home and contents / owner-occupier insurance protects an owner-occupied home. It generally excludes paying guests, because taking money for accommodation is a commercial activity. Let a room or the whole property on Airbnb and a guest-related claim can be refused.
• Standard landlord insurance is written for long-term tenants on a lease, usually of three months or more. Most landlord policies do not extend to short-term holiday letting, so the nightly-and-weekly guest model falls outside the cover.

The common thread is commercial classification. Many insurers treat short-stay as commercial use, which standard residential policies explicitly exclude. And there is a sting: if you have not told your insurer you are letting short-stay, non-disclosure can void a claim, even an unrelated one, so quietly running short-stay on a residential policy is a false economy.

A policy written for short-stay or holiday letting should cover, at a minimum:

• Building and contents, including damage caused by paying guests
• Public liability, essential. If a guest is injured at your property, the claim can be very large, and this is the cover most at risk when you rely on a residential policy
• Guest-caused damage and theft, including (on many policies) malicious and accidental damage
• Loss of rental income if the property becomes unlettable after an insured event

Confirm each of these in writing, and confirm the policy is current for the way you actually operate (whole-property vs hosted, number of guests, direct bookings as well as platform bookings).

Airbnb’s AirCover and similar host guarantees are useful, but they are a backstop, not a substitute for your own policy. Owners are routinely caught out because:

• They are not a full liability policy, and public liability is the big exposure
• They carry limits, excesses and exclusions, and claims can be slow or contested
• They typically apply only to bookings made through that platform, a direct booking or a booking on another site may not be covered at all
• They are not a substitute for building cover required by your lender or strata scheme

Treat platform cover as an extra layer on top of a proper short-stay policy, never as the policy itself.

Even specialist short-stay policies carry exclusions worth reading before you sign:

• Wear and tear and gradual damage (never covered)
• Intentional or malicious damage limits, or sub-limits on guest damage
• Vacancy clauses, cover can lapse if the property is left unoccupied beyond a set period
• Waiting periods for certain events early in the policy
• Flood, storm or bushfire terms specific to your location

1. Tell your insurer you are letting short-stay, in writing, before your first booking.
2. Get a short-stay or holiday-let policy with public liability and guest-damage cover.
3. Check it covers direct bookings, not just platform bookings, if you take any.
4. Confirm building cover meets any lender or strata requirement.
5. Review it annually, and whenever you change how you operate.

Keeping your insurance current is one of the things a manager handles as part of running the property; see our short-stay property management service. For the full compliance picture, including registration and planning, see our WA STRA compliance guide.

This article is general information only, current at the time of writing, and is not financial or insurance advice. Policies and exclusions vary significantly between insurers; confirm cover in writing with your insurer or a licensed broker before taking bookings.