Are you covered for short term lets?

With the rise in popularity of the “AirBNB” holiday let style renting becoming more popular I thought it worth looking at how the insurers view this type of rental.

According to PWC, the UK’s sharing economy could be worth as much as £9bn within the next 10 years. Home sharing is a particularly popular proposition, with companies such as Airbnb providing a platform for hosts looking to rent out their property. But is the insurance industry responding to this growing market, and do home-sharing hosts understand the implications and exclusions that could potentially invalidate their home insurance?

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.

Whilst 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, ortheft 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 have a client that is looking to use Airbnb, or the like, advise them to get in touch with their insurer before they 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.

Back to news
Beside you all the way
At Zing, we’re here to help you throughout your mortgage application. From your first enquiry through to completion - we’re here to make the whole process easier for you.
03332 414 113
Monday - Friday: 9:00am - 5:00pm
What our clients say
4.9/5
Efficient and Excellent Experience
1st time buyers and they made the whole process really easy from start to finish. Kept us up to date throughout and answered any questions we had strait away. Thank you Zing
Rion in Sevenoaks
Best choice we made
Gary was patient & understanding when dealing with our mortgage. Ellie was brilliant with weekly updates that increased to daily as we neared completion. Can't thank the team at Zing enough, would recommend to anyone.
Julie in Southend-On-Sea
Great service
Great service from start to finish. Lee was very knowledgable and got us the deal we where looking for. Was kept informed and he was always available, or called us back. Would highly recommend.
Brian in Ware
Excellent
Very nice service I will recommend it to my friends and if I need will use again. Very big thanks for Ian.
Volodimir
Good overall service
We have used zings services for a number of years now and have always been very happy with there services, although we had a bit of a slow start this time everything was completed well and would recommend them again for the future.
Steve in Essex
Would recommend
They chased the solicitors continuously for what was a long tome! They kept me up to date throughout which I really appreciated
Denise
Feefo logo