- London flat ruined after renting it out for the night on Airbnb
- Airbnb’s ‘Host Guarantee’ won’t cover theft, pets, cash or personal liability
- Most home insurers won’t cover damage or theft by paying guests
Smashed windows, flooded bathrooms, broken china and red wine all over the cream carpets – your worst nightmare or a very real possibility should you rent your home out to the wrong guests?
The horror story came true last week for a couple in south London when their flat was rented out via Airbnb and ruined by a group who threw a ‘drug-fuelled party’.
This is an extreme but not unprecedented incident: so what do you need to know if you’re thinking about renting your home out? We take a look at exactly what you’re covered for – and what you’re not – should the worst happen.
Airbnb’s ‘host guarantee’ has lots of limitations such as cash, jewellery, pets and personal liability
If you rent out your flat on a short-term basis and something goes wrong, you’re covered by your home insurance right? Or if not Airbnb’s ‘host guarantee’? Actually no – while both will provide some level of cover you can’t claim for everything, with theft and accidental damage left out of most policies.
Airbnb provides limited cover through its host guarantee
Airbnb has what is called a ‘host guarantee’ which covers those renting out their homes for up to £650,000 worth of damages.
But there are several important elements missing from the guarantee such as; cash and securities, pets, personal liability and shared or common areas.
There are also limits on the amount of cover for valuable items such as jewellery, collectibles and art work and it won’t cover for reasonable wear and tear.
Airbnb’s guarantee isn’t an insurance policy and it says you should use separate cover for full protection
This isn’t an insurance policy, as Airbnb clearly states, and it recommends taking out separate insurance from a home insurer for full protection.
However, many home insurance policies won’t allow for paying guests, so before letting your place out it’s worth reading the small print.
Protection through your home insurance policy
As standard most home insurance policies cover the policy holder, their partner, and family. Paying guests or lodgers aren’t usually included.
‘Renting out a spare room is an increasingly popular way of earning some extra cash and – in some cases – is helping to give independent travellers a unique and personalised holiday experience.
‘However, it’s generally difficult to predict how your lodger is going to use your home, until they’re settled-in,’ explains Simon Warsop, chief underwriting officer for home insurance at Aviva
‘The cost of home insurance is calculated on an individual basis and is not just based on the house itself but how many people live in it, and how it’s used,’ he adds.
You may be covered under your home insurance policy but the cover varies depending on your insurer
If you’re thinking about putting your place on Airbnb you should officially tell your insurer. It may be possible to increase the cover on a short-term basis and you’ll either be charged a one-off fee or your premium will be increased.
Direct Line, for example, says it may cover customers if they are letting a room or their home out on an occasional basis but it won’t cover liability claims for damages the policy holder incurs as a result of letting out the place.
While a spokesperson for LV, said: ‘As a general rule, we don’t cover Airbnb usage because rooms are being let on a short-term basis, which presents a number of additional risks that home insurance isn’t designed to cater for.
Specialist insurance for holiday lettings may be the only option for full cover including public liability cover
‘For example, home policies usually exclude damage and theft caused by tenants, which means the cover may not be suitable for people wishing to rent out their home or part of their home.’
Specialist cover for holiday lettings
If your home insurer won’t provide cover for paying guests – even on an occasional basis – or you’re not happy with the cover it’s offering, your other option is to seek out a specialist provider.
These often give a greater level of protection and include public liability cover for the people staying – should they have an accident while in your home.
However, these policies are likely to come with a higher price tag so always compare prices before buying.
There are several specialist insurers which provider cover for those letting out their homes for short and long-term periods and the British Insurance Brokers’ Association’s (BIBA) Find-A-Broker service is a good place to start.
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