Airbnb offers homeowners in the UK the opportunity to make some extra money by renting our their homes.
For many this seems like a very lucrative and intriguing business but there are many insurance implications that you will need to consider first.
Insurance startup Bought By Many have made your life a little easier by reviewing insurance policies concerning Airbnb hosts. Some terms and conditions are very interesting and anyone who is thinking about joining this business should read this article before commiting.
1. You do need to tell your home insurance company if you’re an Airbnb host
Home insurance companies are rather old-fashioned. They don’t have much awareness of how popular Airbnb has become, and they’ve done almost nothing to adapt their policies. As a result, they think of Airbnb hosting as being the same as running an actual B&B…
If you don’t tell them you have Airbnb guests occasionally staying at your house, they may refuse to pay out on an insurance claim you make – even if the claim has nothing to do with an Airbnb guest. Their justification would be that you had witheld an important piece of information that affected the risk they were taking in insuring your property (their jargon for this is “non disclosure”).
Alternatively, you could switch to a specialist company who cover Airbnb hosts as standard. Home Protect is the only home insurance company we are aware of from our research who state specifically that they cover Airbnb hosting.
2. Airbnb’s Host Guarantee is not the same as home insurance, and there are lots of things it doesn’t cover
Airbnb offers £600,000 of insurance to hosts through its Host Guarantee (sometimes referred to as the “1m guarantee”, as that’s the amount of the cover in US dollars). This is intended to cover damage to your property caused by an Airbnb guest.
But it has some important limitations and exclusions:
- The Airbnb Host Guarantee doesn’t cover cash, valuables, or pets – so if a guest stole money from you, damaged your Macbook, or injured your dog, it would not pay out.
- It doesn’t cover damage caused to shared or communal areas – such as common entrance halls or bike stores in blocks of flats.
If you want to be insured for these risks, you will need to arrange it with your current home insurance company, or switch to a specialist.
3. Having Airbnb guests to stay can make you liable for things that happen to them
There is no personal liability insurance included as part of the Airbnb Host Guarantee. So, if a guest sued you for harming them in some way, or because they hurt themselves in your property and believed you were responsible, the Airbnb guarantee would not cover you.
You guessed it – you’d need to contact your home insurer if you wanted to be covered for this risk.
4. All the same issues exist with other short-term property and room rental sites
Wimdu has a similar guarantee to Airbnb, but with a slightly lower total amount of cover (500,000 Euros).
One Fine Stay claims to have gone further than other sites, but doesn’t provide information about its insurance policy online.
Housetrip, meanwhile, appears to provide no insurance – its terms and conditions simply state “We recommend that Hosts obtain appropriate insurance for their rental properties listed on the Site”
Surely the insurance industry will change its approach soon?
I think that’s unlikely. In the US, where Airbnb is longer-established, some insurance companies have withdrawn cover from Airbnb hosts, while others won’t state clearly that Airbnb hosting is covered. In December, the New York times reported that one home insurer had insisted that their customer of 25 years install fire escapes from every bedroom if she wanted to continue being covered!
Main image: Adapted from a photo of an apartment available on Airbnb by EFFIE YANG @ Flickr
