Toilet blockages, carpet burns and broken bed legs are just some of the accidents hitting holiday rental property owners and it is on the rise as a result of an increase in the number of people who rent their property out on Airbnb. Mitch Sweeney explains the potential risks involved.
Transcript:
Kevin: As the sharing accommodation market grows with things like Airbnb, we’re finding out more and more what tenants are doing, what damage there could be. I wonder if you know, as a property owner or as an investor, exactly what’s happening in your place. Maybe you don’t want to know.
There’s an interesting survey amongst a number of people – about a thousand people, I believe – that was carried out by Share Cover into exactly what does happen in some of these accommodation houses. Joining me to talk about this from ShareCover, Mitch Sweeney.
Mitch, you did this survey amongst a thousand people. Were they all tenants?
Mitch: Hi, Kevin. Thanks for having me. No, they weren’t all tenants. It was a survey of a thousand people that was nationwide. It was selected from just a random group, so no, it wasn’t all tenants.
Kevin: What was the bottom line? What did you find out, maybe some things that you didn’t know?
Mitch: Yes and no. The things that we did know, we do know, for example, the first thing that we found, one in five people within this survey had been to a holiday rental property where they’d been to a party or hosted the party.
I guess that’s not surprising because a lot of the time, when people do go away to another place and stay, they are catching up with family, friends or they are at an event like a wedding or a 21st or 50th, so it is likely that they are possibly having a party there or they’re going to a party in the place that they’re staying.
Kevin: I guess it’s only fair that when you rent a place out, you have to expect that the people are going to live in it and that people do have parties. I suppose it’s not so much the party; it’s the damage that may follow on from that, Mitch.
Mitch: Yes, that’s exactly right. And the thing with people going to another property, that’s most likely the first time they’ve been in that environment, being in a property, so it’s an environment that they’ve never been in before. So, there’s inherent risk with that, and obviously, people are people and accidents happen. When you’re in an unfamiliar environment, things can happen, and accidental things mostly, a lot of the time, are the things that do occur.
Kevin: What have you found out are some of the most common breakages?
Mitch: Again, accidental stuff, so people tripping over or accidentally bumping a TV when they’re walking past it. For example, we’ve had a few claims that we released the story of. One was a frozen chicken that was taken out of the freezer, and it dropped into a ceramic sink and cracked it. That’s something that you would never predict happening.
Again, there was another where, as I was alluding to earlier, people were away for New Year’s, they were at a property, got a little bit over-excited and planned to bring in the new year with a few sparklers. Those sparklers got a little bit hot and accidentally dropped them on the floor, and yes, it created a few burn marks on that floor.
Again, those accidental things happen. No malice in it; it’s just people are people.
Kevin: We’ll talk about cover in just a moment, but did you find that one sex over the other is more likely to be accident-prone?
Mitch: We did find that men within the 25-to-35-year-old age bracket were more likely within this survey, but I think it’s representative of not just men in that age bracket are susceptible for damage; I think any time that you have a person who has never been in your property before, you have to expect some kind of risk will come with that. So, I think any host should be diligent no matter what the guest they have coming into their property.
Kevin: Let’s talk about insurance. Does a standard home and contents insurance, or even landlord insurance, cover you for some of these short-stay accommodations?
Mitch: Typically, no. With a home and contents policy, that’s for the private use of a property, and when you do have a paying guest in your property, that typically is a commercial transaction, and therefore, you’re using your property for commercial purposes. That’s why ShareCover, we’ve created it and we offer that policy in the market that covers you specifically for paying guests being in your property for a short period of time.
Kevin: It’s specific to the share accommodation?
Mitch: Yes, exactly right. Whether you’re renting out on shared accommodation platforms like Stays and Airbnb or through a real estate agent, or a lot of people, we’re finding out, do have their own websites that they use to take bookings for their property.
Kevin: In the event that I had a property that was being managed under normal tenancy arrangement, I have a landlord protection insurance over it, and then I decide to switch and go to something like Airbnb, do I need to notify my insurance company, or should I be looking at a whole different policy?
Mitch: I can’t speak around what each insurer would stand for this, but it’s something that we would recommend each host does speak to their current insurer and feel comfortable that that is something the insurer might cover, or if they’re not going to cover it, know that there are other options out there, like for example, ShareCover.
It’s all about being informed as the host, and there are so many great channels out there through Airbnb community forums, Stays community forums, calling the insurer themselves, or Googling.
Kevin: It’s a very timely instruction, really, to be looking at this. I’ve been talking to Mitch Sweeney who is from ShareCover. You can get more information by going to their website to find out a little bit more about this.
Mitch, thanks so much for your time.
Mitch: Great. Thanks, Kevin. Thanks for having me.