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Airbnb and your insurance

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It has become the go-to solution for many landlords looking to fill short-term tenancies that may be available, but has the spread of sites such as Airbnb grown out of all control?

That is the question posed by an article in the Guardian newspaper on the 20th of February 2020 which revealed that in some parts of the UK, Airbnb listings account for one in every four homes.

What may represent a short-term profit for the landlords of such short-term lets is nevertheless a serious loss to those tenants seeking longer-term tenancies or others looking to buy their first home.

The argument was illustrated by findings that there were 25 Airbnb listings for every 100 dwellings on the Isle of Skye in northwest Scotland, 29 per 100 dwellings in Edinburgh’s Old Town, 19 in Ambleside on Windemere in the Lake District, 23 in Woolacombe, Devon, and 15 for every 100 dwellings in parts of London.

Insurance for Airbnb

In the scramble to attract guests for your Airbnb listing you might also be overlooking a critical safeguard which any landlord or homeowner continues to need – insurance.

Insurance is essential for protecting the structure and fabric of your home and its contents against loss or damage from all manner of perils. Landlord liability indemnity insurance also provides the defence you may need against claims from guests who hold you responsible for injuries or property damage they may have suffered.

Without suitable insurance, you could be seriously out of pocket for any losses incurred – especially if you are unfortunate enough to fall prey to one of the horror stories of Airbnb booking gone horribly wrong that emerge from time to time.

If you are in any doubt about the protection provided by suitable insurance for your home in such circumstances, simply apply for a free copy of our comprehensive guide on Airbnb and insurance.

Airbnb’s “host protection” scheme

The unwary homeowner or landlord might be taken in by the apparent protection offered by Airbnb’s own host protection scheme.

The company’s so-called host protection insurance is a free service for registered hosts of the programme. According to the website, the scheme is designed to help cover third party claims arising from property damage caused by irresponsible guests or personal injury suffered by them when they have made an Airbnb booking.

The scheme offers compensation of up to a maximum of US$1 million (currently, approximately £800,000).

However generous the scheme might appear, its benefits are, in fact, relatively limited. For example, it does not cover the theft, accidental or malicious damage or loss of items of particular value – such as works of art or other collectibles – and neither does it afford any protection against injuries to your pets.

You might also question the level of cover provided against claims alleging landlord’s liability for injury or property damage. Regular home insurance and landlord insurance policies, for example, typically offer at least £1 million of indemnity cover – and some policies even provide up to £5 million of cover as standard.

 

The limitations of the Host Protection scheme underscore the need to arrange separate home insurance if you intend to let your property via Airbnb.