Insurance – what cover do I need for my short term lets?
The popularity of Airbnb has led to many people choosing to become hosts themselves; a choice that can be hugely beneficial, but one that is not without its issues. One of the most pressing concerns for new Airbnb hosts is managing the legal requirements of the process, which can be confusing and rather opaque. To combat this, many new hosts opt to request the assistance of property management services to ensure they have all their bases covered.
One of the areas that are of concern for new hosts is the risk factor that is involved in letting a property to strangers on a short-term basis. Given that most hosts will have invested substantial sums in their property and the belongings, such as furniture, contained within it, the need for insurance cannot be overlooked – but obtaining the right short-let insurance can be more complex than it first appears.
Will normal home insurance cover a property that is let on Airbnb?
No. Unfortunately, a standard home insurance policy will not provide sufficient coverage when letting your property to Airbnb guests. If you rent a room, or the full property, to Airbnb guests without informing your insurer of this intention, then your entire policy can be invalidated. It is vital that any cover you obtain makes explicit mention of the fact you will be renting your property. This is the case whether you are renting a single room or the entire property.
When you contact your insurer to inform them of your intention to let out short-term, they will almost certainly inform you that you need to change your insurance.
Exploring your options
You are faced with two options:
- Extend your existing home insurance to cover short-term lettings, as mentioned above
- Cancel your existing policy, and switch to a specialist lettings insurer, such as Home Protect and Insurance Choice. Both insurers offer bespoke policies covering you for short-term lets.
However, it is important to note that you must be cautious of hidden terms and conditions when selecting from the offers above. This is because some policies do not cover accidental damage by guests, so make sure you read the small print to ensure you are covered for all eventualities.
Factoring in Airbnb Host Guarantee
You may have read through the above note regarding accidental damage and assumed this was unnecessary, given that Airbnb promote a “host guarantee” that covers hosts for up to £600,000 worth of damage caused by guests.
Unfortunately, this guarantee is insufficient to cover all eventualities, and should not be relied on in place of an insurance policy. The host guarantee is rather limited, and does not cover areas such as fire damage, flood damage, artwork, cash, and much more besides. As a result, you’ll still need good property insurance, complete with accidental damage protection, to keep your property and belongings safe.
Be cautious with guests
Finally, it is important to note that you should be cautious about the guests you accept at your property – even if you have comprehensive insurance coverage. Read the reviews of guests before accepting their booking, ask for photo identification along with a deposit if you are still uncertain.