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How AirBNB could threaten your home insurance

Kit Klarenberg
Written By:
Kit Klarenberg
Posted:
Updated:
09/06/2015

The surge in popularity of social travel sites such as Airbnb in recent years has meant that homeowners and renters the world over have been able to glean extra income.

However, this new freedom means new responsibility, warns Gocompare.com Home Insurance. People interested in capitalising on the service must check with their home insurer, landlord or mortgage provider before signing-up as home-hosts – or risk invalidating their insurance and breaking the terms of their lease or mortgage agreement.

“Premiums for household buildings and contents insurance are partly based on who lives in the property and what the property is used for,” explains Ben Wilson of Gocompare.com Home Insurance. “So, your insurer will want to know if you plan to let out your home in part or entirely, even on a short-term basis, and may refuse cover, charge an extra premium or put restrictions the cover provided.  For instance, cover for theft may be excluded unless there are signs of a break in.”

Wilson further recommends checking whether your home insurance includes public liability cover, which will cover you if anyone injures themselves on or around your property.

Hosts who don’t inform their insurers could face dire consequences if they end up needing to make a claim; “your insurer may refuse to pay the claim and your insurance could be invalidated,” Wilson warns.

If you own your home via mortgage, then you must consult with your lender to ensure that being a home-host doesn’t breach the terms of your mortgage agreement – after all, Wilson notes, home-hosting effectively equates to a short-term let. Conversely, if you live in a rental property, you should seek permission from your landlord before enlisting to become a home-host; doing so could well break the terms of a tenancy agreement.

“While being a home-host can be a good way of generating extra income from your home, it could also severely damage your household finances,” concludes Wilson. “Therefore we strongly advise people to contact their insurer, landlord or mortgage provider before welcoming any paying guests.”