Does your Airbnb property need short-term rental insurance?

Imagine this: your Airbnb guest accidentally knocks over a lamp, scratches your polished timber floors with their suitcase, or slips on your deck after a summer storm. Now imagine discovering your regular home insurance won’t cover any of it. Scary, right?

Welcome to the reality of short-term rental hosting in 2025.

As Australia's short-term rental market continues to boom, many property owners are realising too late that their standard insurance policy doesn’t cut it. Whether you’re renting out your beachside cottage in Byron Bay or a high-rise apartment in Melbourne, specialist insurance is no longer optional. It’s essential.

Let’s unpack why hosts need dedicated short-term rental insurance, answer the most common questions, and show you how to protect both your property and your peace of mind.

Why regular insurance doesn’t protect Airbnb hosts

Truth is when your hosting guests in your property, you're already running a business.

Home and contents insurance is designed for owner-occupiers or long-term tenants. But once you start accepting paying guests, even occasionally, most insurers classify your property as a business. And business activity is usually excluded under standard policies.

This means if something goes wrong, you could be on your own.

Without short-term rental insurance, you may be liable for:‍

• ‍Accidental property damage – think broken furniture,     damaged walls, or stains on carpets‍
• Personal liability– if a guest is injured while staying at your property
• Theft – including electronics, artwork, or even bed linen

One bad stay could cost thousands in out-of-pocket expenses or legal claims. And that’s not a risk worth taking.

FAQs: Short-term rental insurance explained

1. Isn’t my home and contents insurance enough?

No. Most traditional insurance won’t cover any damages caused by short-term guests. Even infrequent hosting can void your policy.

2025 Tip: Some insurers now use AI to detect short-term rental activity. If they find your property listed online and you haven’t declared it, your claim could be denied.

2. What if I already have landlord insurance?

Landlord insurance offers better coverage but it’s still not ideal for short stays. Many policies:

• Only apply to leases longer than 90 days
• Don’t cover guest-caused damage
• Exclude theft of high-value items
• Require formal lease agreements to lodge a claim

Always read your ProductDisclosure Statement (PDS) carefully.

3. Doesn’t Airbnb cover damages?

Airbnb offers a Host Damage Protection program and Host Liability Insurance, but these are not full insurance policies.

• Coverage only applies to bookings made through Airbnb—not Stayz, Booking.com, or direct reservations
• Airbnb may reject claims due to exclusions like "wear and tear" or lack of documentation
• Personal belongings and high-value items may not be covered

Real Talk: Airbnb’s cover should be seen as a backup, not your main safety net.

What makes short-term rental insurance different?

Specialist short-term rental insurance is built specifically for the unique risks of hosting. These policies usually include:

• Cover for 1-night stays – no minimum lease requirement
• Accidental and malicious damage – including by guests
• Higher contents coverage – for appliances, electronics, and furniture
• Public liability – often up to $20 million
• Theft without forced entry – a major exclusion in most regular policies

Pro Tip: Some policies even offer income loss coverage if your place becomes uninhabitable.

Top insurance options for Aussie hosts in 2025

Here are three trusted options tailored for Australian short-term rental property owners:

1. IAG ShareCover

• Great for casual or part-time hosts
• Flexible, pay-per-night model
• Easy online application

2. BJS Holiday Rental Insurance

• Strong coverage for theft and guest damage
• Ideal for coastal or holiday destinations

3. EBM RentCover ShortTerm

• Best suited for full-time or high-volume hosts
• Comprehensive property and liability cover

Compare policy features and pricing before deciding. Always prioritise claims reputation and customer service.

Hosting with confidence: Why MadeComfy makes it easy

You didn’t invest in property to chase guests for damages or argue with insurers. That’s where MadeComfy steps in.

We offer:

• Listing optimisation to maximise bookings and nightly rates
• 24/7 guest support so you never get a 2AM lost-key call
• Professional cleaning and property maintenance – because presentation matters

And yes, we’ll help you navigate insurance too. Our hosts earn up to 40%more compared to traditional leasing, all while enjoying full property management support.

If you’re renting out your home on Airbnb or any other platform, short-term rental insurance isn’t just a good idea, t’s a must. Without it, you risk financial loss, legal trouble, and a whole lot of stress.

With the right policy and a professional partner like MadeComfy, you can host with peace of mind and maximise your property’s potential.

CONTACT US to get a free rental assessment and see what your property could earn!