When the Guest Steals the Keys And Everything Else

In South Africa’s growing short term rental market, many property owners are discovering that letting out their property comes with hard lessons. The Davidson case, recently reported on in News24, is one of those lessons—costly, painful and entirely avoidable with the right insurance and risk structure.

 

The Davidson Disaster: A Flat Stripped, A Dream Derailed

 

The Davidsons furnished their Randburg apartment with care—high quality finishes, good linen, the kind of touches that elevate a rental from basic to boutique. Their first guest booked via Booking.com: a one night, last minute stay.

 

It seemed like a win. Instead, it was a calculated theft.

 

The guest vanished before checkout, taking the apartment keys, large appliances, linens and more. With each visit back to the flat, the Davidsons noticed more missing. Their losses exceeded R20,000. And their earnings from the booking? Just R460.

 

Worse still, the insurer rejected the claim. There were no signs of forced entry. The Davidsons had, however unknowingly, invited the thief in and handed over the keys.

 

They are not alone. In Benoni, another couple suffered a R60,000 loss under almost identical circumstances. A guest, a van and a one night stay were all it took. Booking.com blocked the user after the fact. The insurer denied the claim. Recovery was minimal and the financial loss sat entirely with the host.

 

Why Your Personal Insurance Will Not Pay

 

What many owners do not realise is that the moment you rent out your home, even for one night, it stops being a private residence in the eyes of the insurer. It becomes a business. And personal insurance policies are not built to protect businesses.

 

Invariably, all South African personal insurance typically excludes theft unless there is forcible and violent entry or exit. If you hand someone a key and they remove your belongings, that is generally not theft in terms of your policy, it is authorised access gone wrong.

 

There is also no cover for business interruption, income loss or legal liability to guests, unless your personal insurance policy is specifically extended, which is rare.

 

Business Insurance: A Non-Negotiable for Short Term Rentals

 

If you are renting out property for income, you must have the right insurance solution.

 

A properly structured business insurance policy for short term hospitality use is essential. These policies are designed to protect your:

 

Assets/Property: With broader cover that can include guest theft (even without forced entry) and malicious damage.

Business income (Business Interruption): If you cannot let your property due to an insured event, like fire, this cover can replace lost rental earnings.

Public liability: Should a guest be injured or suffer an insured liability loss while staying at your property, commercial public liability protects you against legal claims, including defence costs.

 

What Should You Do? Chadwicks View

 

At Chadwicks, we cannot overstate this insurance approach:

• Always disclose short term rental use to your insurer.
• Never rely on personal insurance for a commercial activity.
• Structure your insurance properly from the start with a business policy that protects your insurable property (assets), business income and legal liability.

 

Risk Mitigation: Instant Bookings v Manual Vetting

 

While our role is insurance, not operational consulting, we see firsthand where breakdowns occur. And in short term rentals, most failures are usually procedural, not accidental.

 

Instant bookings are a major contributor to risk. Both the Davidson and Benoni cases involved last minute, one night guests. These types of bookings offer little to no screening time, and they strip the host of agency to ask red flag questions or enforce preauthorisation credit card security.

 

Instead, implement a manual vetting process. Platforms like Booking.com and Airbnb allow for pre booking guest screening, beyond their platform screening. Use this opportunity to ask red flag questions. Verify IDs. Review the guest’s platform history. If you sense something is off, do not confirm the booking or do more digging.

 

Avoid underpricing or acceptance of last minute stays. The R460 the Davidsons earned came nowhere close to offsetting their loss. Sometimes, the cost of a “yes” is far too high.

 

Security measures can make a difference. While privacy laws prohibit indoor monitoring, exterior doorbell cameras and entrance CCTV are permissible and smart. They serve as both a deterrent and a means of incident verification.

 

Lastly, use high value preauthorisation credit card holds. Car rental agencies have long known this: the greater the hold, the lower the risk of opportunistic abuse. For short term rentals, the same principle applies.

 

Short Term vs Long Term Rentals: Two Different Worlds

 

Short term rentals (typically stays under 30 days) are guest facing operations. They involve high turnover, minimal contractual structure and significant exposure to the public. That requires both proper commercial insurance and rigorous guest management protocols.

 

Long-term rentals (typically 30+ days) are usually governed by written lease agreements and demand in depth vetting like credit reports, income proof, prior rental references and more. These arrangements come with stability, but require legal structure and scrutiny from day one.

 

In both cases, the risk profile and the insurance requirements are distinct. A one size fits all approach does not work.

 

Moving Forward With Clarity

 

The Davidson case is not an isolated event, it is just one of many that rarely make headlines. Increasingly, property owners are entering the short term rental space without fully grasping the legal, financial or insurance implications. The consequences can be severe. In the Davidson example, the R20,000 loss could only have been the beginning. Had the property suffered a major insured event, such as a total fire loss during a rental period, the entire claim would more than likely have been denied due to non disclosure of short-term letting. Without proper insurance structuring, owners stand to lose everything.

 

Approach short term rentals as a business. That means:

1. Disclosing your activities to your insurer. Always
2. Securing business insurance specific to your letting activity
3. Applying guest vetting and security protocols with the same seriousness as any hospitality operator

 

If you are hosting, host wisely. Disclose. Insure. Vet. And when in doubt, walk away from the booking – one night of high risk can cost far more than it earns.