The short answer
Your existing home and contents policy almost certainly does not cover paying guests. NSW law requires you to hold liability insurance for third-party injury and death during every occupancy period.[1] Airbnb's built-in protection, AirCover, does not replace that obligation — it is a platform programme with its own limits and exclusions, not a general Australian insurance policy.[2] Before your first booking, you need written confirmation from an insurer that your actual short-stay activity is covered. This article explains the gaps, what AirCover does and does not do, what a dedicated short-stay policy usually covers, and what to check before you go live.
Why your current policy probably will not cover you
Standard home and contents policies are priced for private residential use — one household, low turnover, no paying guests. When you start accepting bookings, several things change from the insurer's perspective.
- Occupancy and risk: frequent guest turnover, unfamiliar people in the property, a higher risk of accidental damage, theft or parties.
- Use of the premises: the insurer may classify short-term letting as a business or commercial accommodation activity rather than ordinary home use.
- Disclosure: most policies require you to tell the insurer about any material change in how the property is used. Hosting paying guests without disclosing it can give the insurer grounds to reduce or refuse a claim.
- Liability: guests, their visitors and other third parties can suffer injury or property damage on your premises. That exposure is different from what a residential homeowner policy typically prices for.
The exclusion is not uniform across all Australian insurers. Some home policies permit occasional letting; others exclude paying guests entirely. The words that matter are the policy's definition of permitted use, its business-use exclusion, any unoccupancy condition, and whether a short-stay endorsement is available. A verbal assurance from a call-centre operator is not enough — get written confirmation.
Landlord insurance is not a straightforward alternative. Most landlord policies are written for a conventional residential tenancy under a lease, involving one household over months or years. A succession of transient guests on a platform like Airbnb or Stayz is a different risk profile. Some landlord policies can be extended to cover short stays; many cannot. Again, the policy wording decides — not the label on the product.
What AirCover does and does not cover
AirCover for Hosts is included automatically for Airbnb hosts at no extra charge. It currently has two main components.[2]
| Component | Stated limit or scope |
|---|---|
| Host damage protection | Up to US$3 million for eligible damage caused by guests to the host's home and belongings, subject to AirCover's terms and exclusions.[2][3] |
| Host liability insurance | Up to US$1 million where the host is legally responsible for a guest's bodily injury, or damage to or theft of a guest's property during an Airbnb stay.[2][4] |
Airbnb is explicit that host damage protection is not an insurance policy, and that not all damage is covered.[2] Airbnb also states that AirCover does not replace homeowners insurance, renters insurance or adequate liability cover.[2][5]
AirCover may not respond to:
- Normal wear and tear, gradual damage or maintenance issues.
- Intentional acts by guests.
- Damage or losses that fall outside the published host-damage programme terms.
- Bookings made outside Airbnb — direct bookings, Stayz, Booking.com and other channels carry no equivalent.
- The host's building, broader contents, loss of income or other liability risks not specifically covered by the programme.
- Claims that do not satisfy the programme's evidence, notification and eligibility requirements.
AirCover's terms can change, so the version in force at the time of any stay is what counts. Check the current terms on Airbnb's site rather than relying on a summary.[2]
Where other platforms leave you
AirCover applies only to Airbnb bookings. Stayz, Booking.com, direct bookings and any other channel you use carry no equivalent programme. If a guest arrives via one of those channels and damages the property or suffers an injury, your protection depends entirely on your own insurance policy.
This matters especially if you list on multiple platforms — a common approach for Sydney properties in areas with strong year-round demand. A beachside suburb like Coogee or an inner-city location such as Potts Point may attract quite different guest mixes across different channels, and a single channel's protection programme is not a substitute for a policy that covers all of your bookings.
Even within Airbnb, AirCover does not cover every scenario. The gap between what the platform programme covers and what a proper insurance policy covers is not theoretical — it is where real claims fall through.
What a short-stay policy typically covers
A dedicated short-stay or holiday-letting policy is specifically written for properties with frequent guest turnover. Depending on the product, it may include:
- Building damage from insured events.
- Contents and furnishings, including movable items such as sofas, beds, televisions and dining furniture — often excluded under building-only or landlord policies.
- Accidental damage caused by guests.
- Malicious damage or theft by guests.
- Loss of booking income or rent following insured damage.
- Public liability for third-party injury or property damage during a stay.
Products vary significantly. Some cover only the building; some are designed as an overlay to an existing home policy; some require you to hold a primary policy as a condition of cover. "Airbnb insurance" is not a standard product category with consistent definitions, so verify precisely which platforms, booking types and occupancy arrangements each policy covers — including direct bookings, owner stays, cleaner access and vacant periods between guests.
Owners commonly look at products from RentCover, ShareCover and Terri Scheer among others. These are options, not recommendations — read each product's PDS carefully and check whether it fits your specific property, location and booking mix. A licensed insurance broker familiar with short-stay properties can help you compare products and confirm that the cover matches what you are actually doing.
Strata, liability and the gaps in between
What strata building insurance does not cover
If your property is in a strata scheme, the owners corporation holds building insurance over common property and the shared structure. That policy is not your insurance. It does not ordinarily cover:
- Your movable contents and furnishings inside the lot.
- Guest belongings.
- Loss of booking income.
- Your personal legal liability arising from operating short-term accommodation.
- Damage caused by your guests that falls outside the strata policy's terms.
A guest injured in a common area may raise a claim involving the owners corporation. A guest injured inside your lot may involve you. Responsibility depends on the facts and the relevant policy wording — do not assume the strata policy covers either situation for your purposes as a host.
NSW owners corporations can also adopt by-laws restricting short-term letting in lots that are not the host's principal place of residence.[6] Having insurance does not override those by-laws, and a by-law breach can in some circumstances affect the standing of your own claim. Obtain the strata scheme's by-laws before you list.
Public liability
NSW's mandatory code of conduct for short-term rental accommodation requires hosts to hold insurance covering liability for third-party injury and death, and the cover must be valid throughout the occupancy period.[1][7] This is a legal obligation, not a suggestion.
Airbnb states that its US$1 million host-liability programme meets the minimum NSW code standard, while also indicating that hosts may want additional cover.[8] Whether US$1 million is adequate for your property and risk profile is a separate question. You should check:
- Whether the limit is per occurrence or in aggregate for the policy period.
- Whether legal defence costs sit inside or outside the limit.
- Whether pools, spas, balconies, driveways and common-area access are covered.
- Whether non-Airbnb guests are covered.
- Whether cover extends to guests who overstay or extend outside the original booking.
For properties in areas like Coogee with pools or ocean frontage, or in high-rise buildings with rooftop terraces, the specific amenities and access arrangements at your property are worth discussing directly with a broker.
What to check before the first booking
NSW requires that a property be registered on the Short-Term Rental Accommodation register before it is advertised or provided as STRA.[6] Registration and the applicable registration fee are confirmed on the NSW Government STRA register page — fees are indexed and the current page should be checked rather than relying on any quoted figure.
Properties must also meet NSW's mandatory fire-safety standard, which covers smoke alarms and other safety equipment.[1] The obligations depend on the premises type; the STRA compliance and fire-safety requirements applying to Sydney properties are worth understanding before you list, since non-compliance can affect both your regulatory standing and, potentially, an insurance claim. Airbnb separately tells Australian hosts to follow applicable smoke-detector rules and to provide and maintain a fire extinguisher.[5]
The 180-day cap on non-hosted STRA in Sydney and other designated areas is also relevant to your insurance disclosures — the activity you describe to the insurer should match what you are actually doing. Exceeding the cap is a planning compliance problem that can also affect your policy conditions.[6] Current rules are on the NSW Planning Portal.
Before your first booking, work through this checklist:
- Notify your home, contents and strata insurers in writing that the property will be used for short-term accommodation, naming the platforms.
- Obtain written confirmation that guest-caused damage, public liability and loss of income are covered — or arrange a dedicated short-stay policy.
- Confirm that contents cover extends to all furnished items inside the lot, not just the building structure.
- Verify that liability cover is valid for every occupancy period, on every channel you use, including direct bookings.
- Check your strata by-laws for any restriction on short-term letting.
- Register the property on the NSW STRA register and complete fire-safety requirements before advertising.
- Read every policy's PDS, not just the product summary.
- Keep records — booking confirmations, guest communications, inspection notes, maintenance logs and incident reports — because insurers will ask for evidence if you claim.
This is not legal, financial or insurance advice. The right cover for your property depends on its structure, location, amenities, booking mix and individual circumstances. Speak with a licensed insurance broker, and if the strata or planning dimensions are complex, a solicitor familiar with NSW property law.
If you want a sense of what your Sydney property might earn before you decide how to operate it, the earnings calculator lets you enter your suburb, number of bedrooms and property type to get an estimate. Treat the output as a starting point rather than a forecast.
Questions owners ask
Does AirCover mean I don't need my own insurance?
No. Airbnb states plainly that AirCover does not replace homeowners insurance, renters insurance or adequate liability cover.[2][5] AirCover is a platform programme tied to Airbnb bookings, with its own exclusions and evidence requirements. It does not cover other channels, and it does not satisfy your obligation to hold insurer-approved cover for your property's actual use. Treat it as a supplementary layer, not your primary protection.
What is the difference between landlord insurance and short-stay insurance?
Landlord insurance is generally designed for a residential tenancy under a lease — one household, a fixed term, formal tenancy law applying. Short-stay insurance is written for frequent guest turnover, holiday letting and platform-based accommodation. Some landlord policies can be extended to cover short stays by endorsement; others exclude it entirely. Read the policy wording, not the product name, to know which category your activity falls into.
Does contents insurance cover my furniture and appliances?
Building insurance typically covers the structure and permanent fixtures. Movable items — sofas, beds, televisions, dining tables — usually require a separate contents section. Some landlord or building-only policies do not cover these items, even if they were present when the policy was taken out. Check the schedule for what is and is not listed, and confirm that guest-caused accidental damage to contents is an insured event under the policy.
What if a guest damages the property or steals something?
AirCover's host-damage protection may respond to some guest-caused damage for Airbnb bookings, but not all damage is covered, and the claim process requires evidence.[2] A dedicated short-stay policy may cover accidental and malicious damage and theft by guests, subject to excesses, limits and exclusions. In practice, your ability to claim depends heavily on having documented the property's condition before and after the stay. Photographs, a written inventory and prompt reporting are the baseline.
Do I need to tell my insurer if a property manager handles the bookings?
Yes. The insurer needs to know who is operating the listing, which platforms are being used and the nature of the occupancy. If a management company is collecting money or arranging stays, that arrangement should be disclosed. A company acting as your agent to arrange stays and collect funds may also need to hold a licence under the Property and Stock Agents Act 2002 (NSW).[7] Before engaging any manager, ask for their licence number and class, the licensee in charge, and whether guest funds are held in a trust account or the company's own account. A licensed NSW real estate agent is required to hold collected funds in a trust account, audited annually as a condition of the licence — this is a practical protection for you as the owner.
What if I let the property long-term for part of the year?
A hybrid model — short-term for part of the year, long-term residential tenancy for the rest — requires insurance that covers both modes of occupation, and the policy terms need to reflect whichever arrangement is in place at any given time. The insurer should be told about both arrangements. A formal residential tenancy agreement during the long-term period brings tenancy legislation into play, which can affect what the landlord can and cannot do. Check with a solicitor if the mix creates ambiguity. For Sydney owners considering this hybrid model, the practical management questions are worth addressing at the same time as the insurance ones.
Can I rely on online forums or platform summaries for insurance guidance?
No. Forum discussions and platform summaries can illustrate the questions other hosts are asking, but they do not establish what your policy covers, what NSW law requires or what an insurer will accept. Some figures quoted online are unverified, out of date or specific to another state or country. The operative documents are your policy's PDS and the relevant NSW legislation and official guidance. A licensed insurance broker gives you advice you can act on; a forum post does not.
If you are working through these questions for a Sydney property and want to talk through the management side — including how registration, compliance and booking operations fit together — get in touch with HomeHost. We can explain how we handle the day-to-day and point you toward the right questions to raise with your insurer and broker.
