Furnished, semi-furnished, or unfurnished property? Insurance essentials for rental properties

Furnished, semi-furnished, or unfurnished property? Insurance essentials for rental properties

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

This uptake in demand has brought a rise in properties being rented, let or changed into businesses such as Airbnb listings or B&Bs. But what many landlords, tenants, B&B owners or Airbnb hosts don’t realise is how the level of furnishing in a property can significantly influence insurance needs.

Unfurnished properties

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. In addition, a public liability extension is essential to protect against third-party claims – e.g. if a tenant or visitor gets injured due to negligence on the premises.

Property owners’ liability cover is also essential to protect against third-party claims. If the tenant or visitor’s property is damaged due to an event which is related to the building – e.g. if a landlord does not maintain the property appropriately, and a roof tile is blown off by the wind damaging a vehicle – the property owner must have the necessary liability cover in place to cater for these damages.

A major misconception among tenants is that the landlord’s policy will cover their possessions, but it won’t. This means tenants need their own contents insurance to protect items like electronics and kitchen appliances. For example, if a geyser bursts and damages your TV, you can only claim if you’re properly insured. The landlord’s policy will likely only cover structural damage caused.

Semi-furnished properties

Semi-furnished homes may include essentials such as a fridge, washing machine or a dining room set. In these cases, landlords either take out contents insurance in addition to the standard building cover or include the contents as part of the rental agreement. A comprehensive inventory list of these items is crucial. Each item should be documented including its replacement value.

Most property owners will include these items as part of the rental agreement, where each item should be documented reflecting 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.

Meanwhile, tenants remain responsible for covering their own belongings. So, if you bring in a high-end speaker system or personal electronics, be sure to specify them in your policy and consider adding these items to ‘all-risk’ cover if they leave the property with you.

Furnished properties

Fully furnished properties – whether rented on a long-term basis or listed on Airbnb – carry the greatest exposure for landlords. Here, a comprehensive contents policy is non-negotiable. From bed linen to TVs, everything should be insured at current replacement value. 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 is also important to keep an up-to-date inventory of all contents that are included in the insurance policy, reflecting the replacement value of each item.

Short-term lets also introduce a higher chance of theft and accidental damage. As such, Airbnb hosts are often faced with exclusions for theft without forced entry or damage caused by guests. Additionally, according to standard Airbnb insurance rules, cover may only apply if you reside permanently on the property and limit guest numbers to under six adults.

Even when the property is fully furnished, tenants should still cover any valuables they bring in. A tenant’s computer, camera or designer coffee machine won’t be included in the landlord’s policy and may require separate listing under contents or all-risk cover.

It is also important to understand that a standard domestic insurance policy typically won’t cover liability arising from paying guests. If you’re listing your property on Airbnb or operating a guesthouse, you will need commercial liability insurance specifically designed to cover short-term or hospitality-related stays. This becomes especially critical when hosting international guests, who may claim damages in foreign currency. If renting out the property as an Airbnb or a B&B, it is crucial that the property owner have a disclaimer in place advising guests that the B&B or Airbnb cannot accept responsibility for their items, and guests should take extra precautions when leaving their belongings unattended.

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. Furthermore, liability insurance can be extended 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 without the appropriate cover, they could result in financially devastating legal and medical claims.

With the right policies and expert advice, property rentals – whether furnished or not – can be an extremely lucrative venture in today’s market. The key, however, is understanding the specific risks you are exposed to, and tailoring your cover accordingly. An experienced adviser can help you navigate exclusions, avoid underinsurance, and ensure that your policy truly fits your property setup.