Latest news: Admiral launches Airbnb host cover. Learn more here.
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 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 - learn more here.
Home insurance about to be cancelled for non-disclosure http://t.co/k0l1eIBpCm— ConsumerActionGroup (@Real_CAG) June 4, 2014
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 (Admiral has just made this much easier for its customers), or switch to a specialist like Home Protect.
Hey @Airbnb sorry to hear that you don't carry laptop theft insurance for your customers...seems like a no brainer— Matt Labate (@mattlabate) January 27, 2015
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 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!
USA's largest home insurer turns away 5-star Airbnb host. Airbnb calls it rare. Is it rare because so few are honest? http://t.co/KFXhnBxyoG— Ron Lieber (@ronlieber) December 23, 2014
But there has been one positive development in the UK recently...
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.
- 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.