To many home owners with a room or two to spare, and owners of holiday homes and holiday lets, Airbnb might seem an opportunity too good to miss.
Simply by signing up on Airbnb’s own website, you are able to join an international community that now stands at more than 2 million listings, currently attracting more than 60 million guests worldwide.
That’s quite a market – and one that might strike you as being too good to be true. Unfortunately, it might prove to be just that if you fail to take a few basic precautions to ensure that you are adequately insured.
There are certainly enough stories about Airbnb hosts finding that their homes have been wrecked by irresponsible or simply inconsiderate guests. The damage done has been expensive to repair and smashed items costly to replace.
Yet here at UKinsuranceNET, we have expressed our concern about whether sufficient warnings have been given about the need for insurance.
Airbnb Host Guarantee
To be fair, Airbnb runs what it calls a Host Guarantee scheme which offers compensation to hosts in the event of guests damaging the property – but there are notable exclusions, including the theft of cash, artwork, jewellery, injury to pets or the home owner’s liability.
Furthermore, the existence of the Host Guarantee does not prevent the guest being held financially responsible if the loss or damage was his or her fault – which may be little comfort if you are the home owner looking for adequate compensation.
Airbnb makes clear that its Host Guarantee programme is no substitute for home owner’s or landlords insurance.
What kind of insurance?
If fact, you need be aware that your existing home or landlord insurance may be inadequate once you become an Airbnb host.
Insurers need to know, of course, the purpose to which any property is being put – since this determines the risk that needs to be insured. You also need to inform your mortgage company and, in many cases, the local authority (who may need to issue a licence allowing you to let the property to Airbnb guests).
If you fail to inform your insurer that you have decided to become a host, your cover may be invalidated and any claim avoided or rejected by the insurer.
Even so, you might find that your current insurer is not prepared to cover the risks or significantly increases the cost of your premiums to do so.
For that reason, we are able to arrange specialist Airbnb insurance, specifically designed to provide the safeguards and protection you may need when acting as a host.
Precise terms and conditions of your Airbnb insurance may differ from one insurer to another, but here are some of the risks against which you might need particular cover:
- as the owner of the property and as an Airbnb host, you owe a duty of care to your guests and if one of them is injured or has their own property damaged, they may hold you responsible and claim for compensation;
- claims like this might reach very substantial amounts, and it is usual for liability indemnity to cover claims of at least £1 million;
Loss or damage to your property
- loss or damage to those items excluded from the Host Guarantee programme, clearly need to be covered – including, for example, loss or damage to personal possessions and injury to any pets you may have;
- although it might not be included in all insurance policies, you may also want to check whether your Airbnb insurance provides cover against malicious damage caused by your guests;
Loss of rental income
- if some insured event results in your accommodation becoming no longer available or usable, you stand to lose the rental income you expected to receive;
- Airbnb typically provides compensation for such losses.
If you take the decision to become an Airbnb host, therefore, you might want to ensure you are appropriately and adequately insured.
Further reading: Guide to Airbnb insurance