What’s this all about?
As the popularity of sites such as Airbnb, Onefinestay and Roomorama grows, it’s important that homeowners know the insurance implications of short-term ‘hosting’.
Whilst renting out a room, garden studio or even an entire house through a property rental website may seem like a great opportunity to provide you with some extra income, you need to be aware of the insurance implications before you allow guests into your home.
A standard household insurance policy gives cover for you and your family who permanently reside at the address. However, typically cover isn’t automatically extended to anyone paying to stay in the property, which would be the case if you rented out part or all of your property through one of the above mentioned websites.
How does this affect you?
Unfortunately, this means that allowing paying guests within your home could potentially affect your existing insurance cover.
Insurers ask questions relevant to the risk they are being asked to cover, and they rely upon the answers provided by the homeowner. If you fail to mention that you will be allowing paying guests to reside at your home, irrespective of the length of time, then you may find that certain claims are not covered or your entire policy is voided.
While this can be frustrating – and expensive – at the time, having a claim declined or a policy voided can also make it much more difficult to obtain cover in the future.
You may also face issues around liability. While a household policy would normally provide cover for claims due to the negligent act of the homeowner, it is usual to have an exclusion for liabilities arising from your job, business trade or profession. The liability section therefore excludes cover for injuries caused negligently to paying guests.
This is relevant if, for example, a guest tripped on the stairs, injuring themselves, due to loose carpet which you were aware of, then you could find yourselves meeting the cost of compensation from your own pocket.
As well as a lack of awareness about the implications for your home insurance, many people who allow paying guests to stay in their home may believe they have protection, for losses and damage incurred by the guest.
Airbnb introduced a host guarantee, for its customers, after a user’s New York apartment was trashed by a ‘friendly’ guest back in 2011. This guarantee provides up to £600,000 of protection for damage caused by guests but it’s important to note that this isn’t insurance and includes a number of conditions and exclusions.
For example, Airbnb’s guarantee excludes cash, pets, shared areas and personal liability and has lower levels of protection for items such as jewellery, collectibles and artwork. This could leave the homeowner who allows paying guests within their home to be out of pocket despite the fee paid by the guest.
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We do everything we possibly can to check that we have got our facts straight, but it’s always possible that we could make a mistake (hopefully not or never would be better). Therefore we would like to make you aware that we accept no responsibility for information that may be factually incorrect or out of date, but we will do our best to make sure that all content is accurate. Our vision behind bringing the blog to the wider community is to keep our clients and prospective clients informed of their legal requirements, the different products on offer and how they may benefit your business and the new schemes we find which we think will benefit you.
We are Personal and Commercial Insurance Brokers based in Newquay, Cornwall, covering the whole of the UK.
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