Insurers have urged Australians planning to rent out their properties during this Easter holiday break to review their insurance policies, warning they may not be covered for damage or other financial loss caused by short-term tenants.

The Insurance Council of Australia (ICA) says a home building or contents claim incurred while a property is being leased out for vacation stays may be declined as most insurers regard short-term holiday rental as a “commercial use” of a property or a business activity.

ICA says the attraction of earning extra income from short-term holiday rental is financially appealing, especially during Easter and Christmas. Almost 500,000 Australian hosts have listed their property on short-term holiday rental platforms since 2016.

For the uninsured, it could lead to disaster if they do not have the right insurance policy, ICA says.

“Short-term renting is a legitimate and attractive activity that turns many homeowners into short-term landlords, but it’s vital that they do this properly and have insurance cover for the unexpected,” ICA CEO Andrew Hall said in a statement today.

“The Insurance Council is aware of frightening stories of hosts returning after short-term paying guests have departed to find their house stripped of possessions or significantly damaged.

“Short-term rental landlords wouldn’t leave home without locking their property – this Easter they mustn’t leave home without the right insurance cover.”

ICA says the industry has responded to the increasing popularity of short-term holiday rentals by offering specialty policies for hosts who self-manage their property.

Such policies can be tailored to match the number of nights a property is rented out and the daily cost can be as little as the price of a take-away coffee. The cover extends to paying guest-related accidental or malicious damage, theft or attempted theft, personal liability if a guest is injured, identity theft, and strata property damage.

ICA also urged Australian against relying solely on host protection insurance offered by rental platforms as there may be gaps in the coverage provided.

Meanwhile Allianz Australia says its new research shows 68% of Australians do not have insurance for the valuables they take with them on holiday and 2 in 5, or 42%, confess they didn’t know valuable items could be insured as an option under their home contents policy.

The research also found 66% did not make a claim when valuable items were stolen, damaged or lost while holidaying. They either blamed themselves for the loss (41%), informed the holiday rental management or hosts (35%) or called the police (31%).

“Having your items stolen, lost or damaged while on holiday is a stressful experience, yet our research shows Aussies may not be making a claim when this happens,” Head of Home Rachael Poole said.

“As Australians are taking more valuable items with them than ever before, there’s a growing need to better insure valuables while we’re away from home.”