Hidden cost for renters and landlords

South African landlords, including those with Airbnb-style rentals, and tenants must ensure they have the right insurance, or risk paying out of pocket for theft or damages.

South Africa’s residential rental market is booming, with national rental growth reaching 5.6% in the first quarter of 2025, according to the PayProp Rental Index. This is the strongest quarterly increase in nearly eight years.

This uptake in demand has seen a rise in the number of properties rented, let, or converted into businesses, such as Airbnb listings or B&BS.

However, PSG Insure’s head of distribution, Ryno de Kock, warned that many landlords, tenants, B&B owners, and Airbnb hosts do not realise how the level of furnishing in a property can significantly influence insurance needs.

Unfurnished rentals typically exclude movable items like furniture and appliances, leaving tenants to bring in their own.

For landlords, this means securing building insurance that covers structural risks like plumbing blowouts, fire damage, or storm-related incidents.

A public liability extension is also essential to protect against third-party claims, such as those arising from a tenant’s or visitor’s injury due to negligence on the premises.

De Kock explained that property owners’ liability is essential to protect against third-party claims. This can arise if the tenant’s or visitor’s property is damaged due to an event related to the building.

For example, if a landlord does not maintain the property appropriately and a roof tile is blown off by the wind and damages a vehicle, the property owner must have the necessary liability insurance in place to cover these damages.

De Kock said a major misconception for tenants is that the landlord’s policy will cover their possessions, when, in reality, it will not. This means renters need their own contents insurance to protect items like electronics and kitchen appliances.

For example, if a geyser bursts and damages their TV, they can only claim if they are properly insured. The landlord’s policy will likely only cover structural damage.

More furniture, more risk

Semi-furnished homes may include essentials such as a fridge, washing machine, or a dining room set. In these cases, De Kock explained that landlords either take out contents insurance in addition to the standard building cover or include the contents in the rental agreement.

A comprehensive inventory list is crucial for these items, and each should be documented with its replacement value.

Most property owners will include these items in the rental agreement, where each item should be documented with its replacement value.

“This will normally shift the responsibility of insuring these items onto the tenant, who can be held liable for these items when the rental agreement ends,” De Kock said.

Tenants, meanwhile, remain responsible for covering their own belongings. So, if they bring in a high-end speaker system or personal electronics, they should specify them in their policy.

They should also consider adding these items to “all-risk” coverage if they leave the property with the tenant. De Kock said that, on the other hand, fully furnished properties, whether rented long-term or listed on Airbnb, carry the greatest exposure for landlords.

He argued that a comprehensive contents policy is non-negotiable for these types of properties. “From bed linen to TVs, everything should be insured at current replacement value,” he said.

“If you’re hosting on Airbnb, make sure your policy covers multiple addresses if you have multiple risks. This will include your home and the rental property – if applicable.”

It’s also important to keep an updated inventory of all contents that are included in the insurance policy, with the replacement value per item.

Short-term lets also introduce a higher chance of theft and accidental damage. As such, Airbnb hosts often face exclusions for theft without forced entry or damage caused by guests.

According to standard Airbnb insurance rules, cover may also only apply if the landlord resides permanently on the property and limits guest numbers to under six adults.

Hidden insurance risks for furnished rentals and Airbnbs

Even when the property is fully furnished, De Kock said tenants should still cover any valuables they bring in.

For example, a tenant’s computer, camera, or designer coffee machine will not be included in the landlord’s policy and may require a separate listing under contents or all-risk cover.

It is also important to understand that a standard domestic insurance policy typically will not cover liability arising from paying guests.

Those listing their property on Airbnb or operating a guesthouse will need commercial liability insurance specifically designed to cover short-term or hospitality-related stays.

De Kock suggested that this becomes especially critical when hosting international guests, who may claim damages in foreign currency.

“If you’re renting out the property as an Airbnb, it’s crucial that the property owner provides the necessary disclaimer to guests that the B&B or Airbnb cannot take responsibility for their items, and the guest should take extra precautions when leaving them unattended,” he said.

If meals are provided as part of a guest’s stay, product liability cover is essential to protect the owner against risks such as food poisoning.

Liability insurance can extend to cover the actions of staff or employees. For example, if a waiter trips on a rug and spills hot coffee on a guest, the owner could be held legally liable.

These scenarios may seem rare, but they could result in financially devastating legal and medical claims without the appropriate cover.