South Africa’s residential rental market boom brought a rise in properties being rented, let or changed into businesses, such as Airbnb listings or B&Bs.
The national rental growth reached 5.6% in the first quarter of 2025 – the strongest quarterly increase in nearly eight years-according to the PayProp Rental Index.
But what many landlords, tenants, B&B owners or Airbnb hosts do not realise is how the level of furnishing in a property can significantly influence insurance needs, says Ryno de Kock, head of distribution at PSG Insure.
He said 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, like if a tenant or visitor gets injured due to negligence on the premises, De Koch said.
Property owners’ liability is also essential to protect against third-party claims, he said.
“If the tenant or visitor’s property gets damaged due to an event which is 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 cover in place to cater for these damages,” De Kock added
For tenants, the head said a major misconception is that the landlord’s policy will cover their possessions.
“It won’t. This means renters 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.”
The insurance company said semi-furnished homes may include essentials such as a fridge, washing machine, or a dining room set.
In these cases, it said landlords either take out contents insurance in addition to the standard building cover or include the contents as part of the rental agreement. It added that a comprehensive inventory list is crucial for these items, and each item should be documented with its replacement value.
The company said most property owners will include these items as part of 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.”
Meanwhile, tenants were said to remain responsible for covering their own belongings. So, if they bring in a high-end speaker system or personal electronics, they must be sure to specify them in their policy and consider adding these items to “all-risk” cover if the property is left with them.
With regards to fully furnished properties, whether rented long-term or listed on Airbnb, these carry the greatest exposure for landlords.
Here, De Kock advised that a comprehensive content 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,” he said.
He added that it is also important to keep an updated inventory of all contents that are included in the insurance policy, with the replacement value per item.
PSG Insure said short-term lets also introduce a higher chance of theft and accidental damage.
As such, he said Airbnb hosts often face exclusions for theft without forced entry or damage caused by guests. Additionally, according to standard Airbnb insurance rules, cover may only apply if one resides permanently on the property and limits guest numbers to under six adults.
The head said even when the property is fully furnished, tenants should still cover any valuables they bring in. He said a tenant’s computer, camera, or designer coffee machine will not be included in the landlord’s policy and may require separate listing under contents or all-risk cover.
De Koch said it is also important to understand that a standard domestic insurance policy typically will not cover liability arising from paying guests. He said if one is listing their property on Airbnb or operating a guesthouse, they will need commercial liability insurance specifically designed to cover short-term or hospitality-related stays.
He also 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.”
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 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 without the appropriate cover, they could result in financially devastating legal and medical claims.
De Kock concluded: “With the right policies and expert advice, property rentals – furnished or not – can be an extremely lucrative venture in today’s market. The key, however, is understanding the specific risks you face 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.
According to the Landlords Association of South Africa (LASA), a commercial lease is a legally binding contract between a landlord and a tenant for the rental of property used for business purposes.
Unlike residential leases, LASA said commercial leases are often highly negotiable and tailored to the specific needs of both parties.
“For landlords and tenants alike, carefully structuring the agreement is essential to protect financial interests, minimise legal risk, and provide clarity throughout the entire lease term.”
LASA said that when structuring a commercial lease agreement to protect one’s interests, they must consider addressing key elements in detail.
“A well-crafted lease reduces misunderstandings, clearly outlines rights and obligations, and provides legal remedies in the event of any problems that may arise.”
