By: Ryno de Kock, Head of Distribution at PSG Insure

Furnished, semi-furnished, or unfurnished property?

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 a businesses, such as Airbnb listings or B&B’s. 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. This is according to Ryno de Kock, Head of Distribution at PSG Insure.

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. 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.

Property owners’ liability is also essential to protect against third-party claims. “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 says.

For tenants, 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.

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 is crucial for these items. Each should be documented with its replacement value.

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, which can be held liable for these items when the rental agreement ends.”

Tenants, meanwhile, 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 long-term or listed on Airbnb – carry the greatest exposure for landlords. Here, de Kock advises that 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,” he says. It’s also important to keep an updated inventory of all contents that is 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. 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’s 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. de Kock suggests 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.

As de Kock concludes, “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.”