Standard landlord insurance almost never covers short-term rental activity. If you’re listing on Airbnb or Stayz under a policy written for a long-term tenant, you may not actually be covered when it counts, and specialised short-term rental insurance typically costs 20% to 30% more for good reason.
Insurance is one of the least exciting parts of running a short-term rental, and one of the easiest to get wrong. Most owners assume their existing landlord policy carries over. It usually doesn’t. Here’s what actually needs covering, and why the gap matters more than it looks.
Why Standard Landlord Insurance Falls Short
Landlord policies are priced and underwritten around a long-term tenant: one household, a signed lease, predictable occupancy. Short-term rentals swap that for a rotating list of guests, higher turnover, and a different risk profile entirely, more wear, more chance of accidental damage, and genuine liability exposure if a guest is injured on site.
Insurers price for the risk they’re told about. If a claim is lodged and the insurer discovers the property was operating as a short-term rental under a standard landlord policy, they can void the claim, or the policy, outright.
Building or Landlord Cover
Covers the structure itself against damage, but needs to be a policy specifically underwritten for short-term or holiday letting rather than a standard tenancy.
Contents Cover
Furnished properties carry more value in contents than most owners realise. Furniture, appliances, linen and fit-out all need to be covered against damage, theft or loss from guest use.
Public Liability
Covers you if a guest is injured on the property, or a third party’s property is damaged as a result of how the property is run. This is arguably the most important cover for STR specifically, given how many people pass through a single listing each year.
Loss of Rental Income
Covers lost booking revenue if the property has to come offline for repairs, an insured event, or a forced compliance issue. Without it, a period offline is pure lost income on top of the repair cost.
What Voids Cover
Compliance and insurance are more connected than most owners expect.
- A lapsed STRA registration can invalidate a claim in NSW
- Missing fire safety equipment (smoke alarms, extinguishers, evacuation diagrams) is a common reason claims are rejected
- Body corporate rule breaches can also affect whether a claim is honoured
- Not disclosing short-term use to the insurer at all is the single biggest reason claims fail
These aren’t separate boxes to tick. They’re often the conditions the policy is actually written against.
What It Actually Costs
Expect to pay more than a standard landlord policy, generally in the 20% to 30% range, reflecting the higher guest turnover and liability exposure. It’s worth treating this as a normal cost of running an STR rather than a reason to under-insure.
Getting the Right Cover in Place
As a licensed real estate agency managing properties across NSW, VIC, QLD and the ACT, we help owners stay on top of the compliance requirements that keep insurance valid, registrations, fire safety standards and body corporate obligations included, so cover isn’t quietly at risk without anyone noticing.
This article is general information only and isn’t a substitute for advice from a licensed insurance broker.
Book a Free Property AssessmentFrequently Asked Questions
Does my existing landlord insurance cover Airbnb?
Usually not. Standard landlord policies are written for long-term tenancies and typically exclude short-term rental use, which can void a claim if discovered.
Is Airbnb’s Host Guarantee enough insurance on its own?
No. It has significant exclusions and gaps, and isn’t a substitute for a proper landlord, contents and public liability policy.
Do I need public liability insurance separately?
In most cases, yes, unless your building or landlord policy specifically includes it. Given how much guest turnover a short-term rental sees, it’s worth confirming rather than assuming.
Why does short-term rental insurance cost more?
Higher guest turnover means higher risk of damage, theft and liability claims compared to a single long-term tenant, which is reflected in the premium.
Will my insurer actually find out if I don’t disclose short-term use?
Often, yes, particularly at claim time, when insurers investigate how a property was actually being used. Non-disclosure is one of the most common reasons claims are rejected.