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 most have 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 withheld an important piece of information that affected the risk they were taking in insuring your property (their jargon for this is "non disclosure").
Some home insurers are more supportive than others. In a Telegraph article from 2016, Aviva said that in most cases it would be able to cover people who wanted to let their homes.
However, even if your home insurer is happy for you to have Airbnb guests they are unlikely to pay claims relating to the people staying in your home.
This is where new policies that work as bolt-ons to existing cover can help. CoverBuilder has launched Home Hosting Insurance, which costs £49.95 a year. It is designed for Airbnb hosts who let a room or their whole property and includes theft and damage to contents or buildings, lost keys, injuries to your guests and alternative accommodation for guests. It also features legal assistance for evictions and assistance in removing defamatory comments on social media.
Get a quote and find out about all of CoverBuilder's features here.
Inlet has created a similar short-term insurance top-up that starts from £39 a year.
Alternatively, you could switch to a company who cover Airbnb hosts as standard. Home Protect and Discount Landlord are specialist home insurance companies who that state they cover Airbnb hosting. If you are insured with Admiral, you can now add Airbnb cover to your home insurance policy with a phone call.
Some home insurance companies have begun introducing dedicated Airbnb insurance, including now4cover Airbnb Host Insurance.
now4cover's policy has no maximum day rental limit, and you are not required to contact the company every time you use Airbnb. It also provides £2 million public liability cover, and the option of unlimited buildings and contents insurance, as well as the option to include accidental and malicious damage cover.
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. 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 (Admiral has just made this much easier for its customers), or switch to a specialist like Home Protect.
3. Airbnb have introduced Host Protection Insurance
Airbnb has introduced a $1 million (roughly £777,900) Host Protection Insurance programme, which could cover you for third-party claims of injury or property damage against you related to a stay. The company's website gives three examples of when this could cover you (taken verbatim from the website here):
- A guest breaks their wrist after slipping on the rug and brings a claim for the injury against the host.
- A guest is working out on the treadmill in the gym of the flat building. The treadmill breaks and the guest is injured when they fall off. They bring a claim for the injury against the host and the landlord.
- A guest accidentally drops their suitcase on a third party's foot in the building lobby. The third party brings a claim for the injury against the host and the landlord of the host’s building.
However, this cover does not extend to slander or libel, any issues with the property, collisions involving vehicles or anything intentional. Moreover, there are certain countries excluded from the programme - fortunately, the United Kingdom is included.
This policy is provided through Lloyd's of London, the London-based insurance market, and is included within your host fees - so no separate payments, and no need to opt in.
4. Similar insurance 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).
- 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"
- One Fine Stay is a little better - it will cover you for 'all Risks of loss or damage to the property insured (including Theft) whilst the host property is under the control of the Insured' for up to £5,000,000 in total. This is subject to a £1,000,000 buildings insurance limit per property and a miscellanous contents limit of £50,000 per property. It also offers public liability cover for £5,000,000. Both of these levels of cover have an excess of £5,000. Bear in mind that you can't find this information on the website - you have to email them for details.
Surely the insurance industry will quickly change its approach?
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 2014, 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!
But there has been positive developments in the UK recently
CoverBuilder and Inlet have created bolt-on host policies
CoverBuilder's Home Hosting Insurance works as a bolt-on to standard house insurance from any company that is happy to cover you while you have guests.
While those companies are happy for you to keep your home insurance policy, they won't pay out of claims relating to your guests, which is where CoverBuilder steps in.
Its policy offers specific cover that will be useful to hosts such as payouts for lost keys, replacement locks and alternative accommodation for your guests if something goes wrong at your house.
Home Hosting Insurance costs £49.95 a year on top of home insurance.
Inlet has created a similar short-term let home insurance top-up that starts from £39 a year.
Admiral offers Host Insurance extension to its Home Insurance policies
On 1st June 2016, Admiral announced that it was launching cover to protect hosts concerned about damage to their properties. Good on them for being the first household-name insurance company to take the issue of hosting insurance seriously!
The key things you need to know about Admiral's Airbnb cover are as follows:
- Homes can only be rented out to guests for a maximum of 90 days per year. This will be no problem for occasional hosts, but the time limit means Admiral's policy add-on isn't suitable for people who regularly rent out their properties for extended periods. This will cover two paying guests per room.
- Admiral does cover jewellery, art, tablets, and other valuable items, up to £5,000. This is a key improvement on Airbnb's Host Guarantee.
- You don't have to contact Admiral every time you rent out your home or room on Airbnb. Once you've added the cover, you don't need to keep contacting Admiral to tell them you have a new booking.
- Cover is only available to Admiral Home Insurance customers, and you have to add it over the phone. Unfortunately, this means you can't simply buy Admiral Home Insurance online at your next renewal and be covered for hosting.
- Second homes and holiday homes aren't covered. Admiral have pointed out that the cover is specifically designed for people renting out their main home.