Considering SA’s rising living costs, more people are renting their homes to boost their incomes. A 2022 Airbnb survey of 1,800 South African hosts and guests reveals that the country’s rising cost of living continues to drive more people to become hosts on the popular platform
Though listing a home on Airbnb might appear to be a quick and easy way to supplement your income, opening your home to strangers will always come with risk. You are entrusting people you don’t know with your belongings and property. In addition, the hospitality industry is unlike any other when buying insurance cover for the risks that could be detrimental to the business. That’s why turning your property into an Airbnb will have different insurance considerations.
“Very few industries need to consider a guest coming down with food poisoning or contest with guests who don’t settle their bills. But unfortunately, that makes the hospitality sector a challenging business that requires hosts to navigate numerous external factors that can have severe consequences for them and their guests,” says Juan Fourie, Head of Hospitality and Leisure (H&L) at Santam. “Due to these risks, hosts must take several measures to ensure their business and guests are protected.”
Although most risks are beyond the control of the Airbnb business owner, they can still have a potentially devastating impact on the business. To mitigate these risks, Santam offers the following advice to hosts.
ADVISE YOUR INSURERS
Retaining your domestic household insurance won’t suffice for Airbnb, as there will be a continuous flow of new guests coming through the property which increases the risk of damage and theft. You must let your insurer know if you’re renting out a room or the entire house so that you can institute hospitality risk insurance. If you fail to do so, your insurer may decline your hosting-related claims because they were not notified about the Airbnb status prior.
AIRCOVER ONLY COVERS THE BASICS
Outside of personal safety, property owners who list their property on Airbnb expose themselves to a host of other risks, such as property and household content theft and potential liability risk if a guest is injured. Even though Airbnb offers damage protection and liability insurance AirCover, property owners should still consult a specialised insurance agent to determine what kind of obligations, limits and coverage they require. Aircover provides hosts with basic coverage for listed damages and liabilities. This cover does not replace homeowners’ insurance, renter’s insurance or adequate liability coverage, especially if hosts need to meet other insurance requirements.
SET AN EMERGENCY PLAN
You must compile a manual for guests detailing what to do if an emergency arises. Ensure that it is obvious where the fire extinguisher is and include essential information such as emergency numbers for the police, fire station and hospital. Clearly show emergency exit routes out of your area.
INVEST IN A SECURITY SYSTEM
A home security system is crucial. Invest in a home security system that allows for home automation which will enable you to control your security system using your mobile device. You will be able to switch the lights on or off, lock the doors or control the heating when there are no guests in your home. It is important to note that when installing a security system, you must be aware of Airbnb’s security policies to avoid legal implications, such as not installing cameras in the guest rooms.
“Operating in the hospitality industry is highly challenging. Therefore, property owners must consult with brokers while listing their homes on Airbnb. This way, necessary precautions are taken to mitigate risks. Furthermore, considering the continuous load- shedding the country is experiencing, we advise property owners to revisit their insurance coverage and obtain advice to consider different circumstances and risk situations that may arise due to power cuts,” says Juan.
