A man prepares a room to rent on Airbnb. Picture: Ben Margot/AP

It is estimated that Airbnb generated R2.4 billion in total economic activity across the country in 2016 – the sum of guest spending and host income. Airbnb recently revealed that the typical host on Airbnb in South Africa shares their home for 16 days and earns an additional R28 000 a year.

A young family in Ballito are letting their home this December while they stay with family for Christmas and are bringing in an extra R115 000 income for five weeks.

The pros of letting your property via Airbnb are big. It is slick, easy and hassle free. Guests are vetted and so are you. But what about other implications that the majority of people don’t consider?

One of these is insurance.

So, what happens if the strangers you allow into your home damage your property, steal precious valuables or worse – burn your house down during their stay? One would assume that your household insurance policy would cover all of that. But according to the experts, this is not the case

“Most people take for granted what their standard household insurance policy will cover. If an incident of damage or theft was to occur when their home is rented out,” explains Kim Henderson of Bidvest Insurance. 

“A policy’s cover is most likely to extend only to the policyholder or family members who normally live at the residence and won’t pay out if something happens while a third party resident is living in their home.

“If an Airbnb guest steals from you, you will not be able to claim from your insurance because there will be no evidence of the use of force or violence. Furthermore, some insurance companies also consider the rental as a business activity, which can give them grounds to decline a claim in respect of any death, injury, illness, loss or damage caused.

So what are we to do? “If you are considering listing your property on Airbnb you should definitely disclose this to your insurance broker timeously and check what limitations and exclusions of cover might apply.” Henderson advises. “My advice would be for people to ensure they take out appropriate cover in case the person renting from you is not able to make good on any loss or damage caused by them, especially if it is substantial”  he confirms.

He also suggests getting guests to sign an agreement stating that they agree to accept responsibility for any loss or damage they might cause. There is no denying that the number of users for Airbnb is growing, with 7 600 homes listed according to a 2015 stat. 

So it makes sense to capitalise on this clever platform, as long as you make sure you have done your homework on what your home insurance policy covers. Because no matter how profitable it is, or how nice the people are who book a stay with you, accidents can happen and that is when you most need your insurance policy to have your back.