You are here: Home - Insurance - Understanding -

What kind of insurance does an Airbnb landlord need?

Written by: Geoff Hall
Do you want to rent out your property via Airbnb? Here are the insurance implications you need to know about...

Airbnb does offer a Host Guarantee, purporting to “insure” people using their platform up to £600,000 for loss or damage. But, and it is a big but, cover is limited and I’d wager not many hosts would be able to recover the cost of loss or damage from it. The “Host Guarantee” only covers actual cash value, including deductions for age or wear and tear, with restrictions for high value items, and exclusions for ‘mysterious disappearance’ or shortages from an inventory. What is more they expect that in the event of loss or damage, the host should seek remuneration directly from the guest in the first instance, and only revert to the guarantee if an agreement cannot be reached. All of this must be done within 14 days, with a crime reference number, proof of ownership and value documentation – a big ask.

Of course, Airbnb do make it very clear in their terms and conditions that this guarantee should not replace the host’s home insurance, and in fairness to Airbnb they have at least arranged some protection for their hosts which those owning/renting a property that allow sharers wouldn’t have. But this is where the big problem lies. Standard home insurance policies will not cover all the risks hosts face.

While most insurers will accept infrequent/short-term/occasional non-paying visitors such as relatives or friends, as a general rule renting out a room to a stranger (especially if you are charging them), even if only for a short amount of time, creates a risk insurers are unwilling to cover.

Even where an insurer does accept visitors of this nature they will almost certainly enforce restrictions. These include:

• No cover for the possessions of the visitor
• Restrictions on damage to the property/contents caused by the visitor, such as accidental loss, malicious damage, or theft unless there is evidence of forcible or violent entry
• Restrictions on valuable items of contents

Currently there is no clear consensus among insurers on this issue, and little in terms of specialist home-sharing policies. If you are looking to use Airbnb, or the like, get in touch with your insurer before you proceed – find out if they will accept paying guests, inform them about how the rented rooms will be used, and find out what restrictions/exclusions they will impose. To be forewarned is to be forearmed.

Geoff Hall is managing director at mortgage broker Berkeley Alexander  

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

Everything you wanted to know about ISAs…but were afraid to ask

The new tax year is less than a fortnight away and for ISA savers or investors, it’s hugely important. If yo...

Your right to a refund if travel is affected by train strikes

There have been a wave of train strikes in the past six months, and for anyone travelling today Friday 3 Febru...

Could you save money with a social broadband tariff?

Two-thirds of low-income households are unaware they could be saving on broadband, according to Uswitch.

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

DIY investors: 10 common mistakes to avoid

For those without the help and experience of an adviser, here are 10 common DIY investor mistakes to avoid.

Mortgage down-valuations: Tips to avoid pulling out of a house sale

Down-valuations are on the rise. So, what does it mean for home buyers, and what can you do?

Five tips for surviving a bear market mauling

The S&P 500 has slipped into bear market territory and for UK investors, the FTSE 250 is also on the edge. Her...

Money Tips of the Week