Shortlet Insurance in Nigeria: What to Ask Insurers

Shortlet insurance protects you against losses a caution deposit cannot cover. Think of a fire, a burst pipe, a break-in, or a guest who is hurt in your flat. An ordinary home policy may not cover paying guests. So tell any insurer that you run a shortlet, and get the cover confirmed in writing.

Cabans does not sell insurance. We name no insurers and quote no premiums, because products and prices change and only an insurer can say what its policy covers. This guide helps you ask the right questions. It is general information, not insurance or legal advice.

What can go wrong

You may never need to claim. But these are the risks worth planning for:

• Damage by guests. Broken furniture, a stained mattress, a cracked TV screen.
• Theft. Items taken by a guest, or a break-in while the flat is empty.
• Fire and electrical faults. Generators, inverters, cooking and overloaded sockets all add to the risk.
• Water damage. A burst pipe, an overflowing tank or a leaking roof in the rainy season.
• Injury. A guest slips by the pool or falls on the stairs, and holds you responsible.
• Lost income. Serious damage closes the flat for weeks, and bookings are lost.
• Power surges. A surge when the grid returns can damage air conditioners, fridges and TVs.
• Guests’ belongings. A guest’s laptop or phone is stolen or damaged, and they ask you to pay.

One serious event can cost more than many months of bookings. That is the gap insurance is for.

You can cut the risk before you insure it. Fit smoke and carbon monoxide alarms, keep a fire extinguisher in the kitchen, and keep the generator outdoors. Set clear house rules on parties and visitors. Our shortlet house rules template and shortlet guest agreement help with the last part.

What a caution deposit covers, and what it does not

A caution deposit is the guest’s money, held during the stay in case of damage or loss. It is useful, but it is not insurance.

So set a deposit that is fair to guests, then insure against what it cannot reach. Our guide to how much caution fee to charge helps with the first part.

On Cabans, the caution deposit is a fixed naira amount you set, and the guest pays it with the booking. After check-out you release it, or raise a dispute with evidence. Nothing is kept until the Cabans team decides, and the most you can keep is the deposit itself. See how to release a caution deposit or raise a dispute, and caution deposit protection for hosts.

Types of cover to ask about

• Buildings cover. The structure: walls, roof and fixed fittings. This is often the owner’s job. If you rent the flat, ask your landlord what is insured.
• Contents cover. Furniture, appliances, electronics, bedding and kitchen items that belong to you.
• Public or third-party liability. Claims by guests or visitors who are hurt, or whose things are damaged.
• Loss of income. Some policies pay for bookings lost while the flat is repaired after an insured event.
• Equipment breakdown. Generators, inverters, air conditioners and water pumps.
• Accidental damage. Sudden damage nobody meant to cause, which basic policies may leave out.

Some insurers sell these separately, and others bundle them. Ask for a written quote that lists each one, with its limit.

How much cover you need

Work this out before you ask for quotes, so you compare like with like. You do not need exact figures, but you need honest ones.

1. Contents. Walk through each room and list what it would cost to replace everything today, not what you paid years ago.
2. Building. If you own it, ask a valuer or surveyor what it would cost to rebuild. That is often different from what the flat would sell for.
3. Liability. Ask the insurer what limits they offer, and what similar hosts choose.
4. Lost income. Look at your booking records and note what a typical month brings in.

Update the numbers when you add furniture or equipment. A new inverter or air conditioner adds to what you need to insure.

Policy words to know

• Sum insured. The most the insurer will pay for a type of loss.
• Excess. The part of each claim you pay yourself before the insurer pays.
• Exclusions. What the policy does not cover. Read this list first.
• Underinsurance. Insuring for less than the true value. A policy may then pay only part of a claim, even a small one.
• Premium. What you pay for the cover, usually each year.
• Disclosure. Your duty to tell the insurer the facts, such as letting to paying guests. Leaving them out can void the cover.

Questions for an insurer

1. Does the policy cover a home let to paying guests for short stays? Can you confirm that in writing?
2. What exactly is covered, and what is left out? Ask for the list of exclusions.
3. Does it cover damage or theft by guests, or only by strangers?
4. What is the excess, the part of each claim you pay yourself?
5. Is there liability cover for guests who are hurt, and up to what amount?
6. Does it pay for lost bookings while repairs are done?
7. What must I do to keep the cover valid: alarms, extinguishers, locks, where the generator stands?
8. How do I make a claim, how long does it take, and what proof do you need?
9. Are you licensed by the National Insurance Commission (NAICOM)?

Tell the insurer everything about how you use the flat. A policy taken out as “my home” may be refused when a claim involves a paying guest. Insurers in Nigeria are licensed by NAICOM, so check the licence before you pay.

Records that help a claim

A claim is only as strong as its proof. Keep these, for every stay, not just the bad ones:

• an inventory of everything in the flat, with photos and receipts;
• photos of every room before each guest arrives and after they leave;
• service records for the generator, inverter, gas and wiring;
• your booking records: the guest’s name, the dates and your messages;
• repair quotes and invoices;
• a police report for any theft or break-in, made quickly.

Our guide to shortlet bookkeeping shows how to keep booking and cost records in one place.

On Cabans, you can add condition photos to each booking, up to 10 at a time. Add check-in photos once the booking is confirmed, and check-out photos when you confirm the check-out. They are kept privately with the booking, along with the guest’s name, the dates, their requests and any bills. The free Host Academy lesson on check-out and the caution deposit walks you through it.

If something goes wrong: first steps

1. Make everyone safe. Turn off power, gas or water if you can do so safely, and call the emergency services if needed.
2. Look after your guest. Help them find somewhere safe to stay if the home cannot be used.
3. Record it. Take photos and videos before anything is moved or cleaned up.
4. Tell your insurer quickly. Your policy may set a time limit for reporting a claim.
5. Report theft to the police, and get a copy of the report.
6. Keep damaged items until the insurer says you can throw them away.
7. Only make urgent repairs to stop more damage, and keep the receipts. Ask the insurer before anything bigger.

Insured and ready? Take bookings online with your caution deposit and house rules shown before guests pay. Cabans charges hosts a 5% commission, the guest pays Paystack’s processing fee, and you are paid within 7 days after the stay. Not listed yet? List your short let first. To see how other hosts present their homes, browse shortlets across Nigeria or shortlets in Lekki.

Frequently asked questions

Related guides

How much caution fee to charge · Shortlet house rules template · Shortlet guest agreement · Power, water and internet · Registering a shortlet business