With a surge in interest in flexible, affordable Airbnb lets, many homeowners are considering turning their homes over to short-term rentals. But opening up your property to rent exposes it to different risks compared to living in your own dwelling yourself, so you’ll want to ensure you have the right coverage in place to protect yourself.
Standard home insurance policies probably won’t cover you for paying guests, depending on the length of time guests will be staying, so you should always contact your insurance provider in advance to find out the situation. Aside from damage to your home and belongings from wild parties, there is also the issue of public liability arising from guests being injured on your property. Not informing your insurance provider that you are renting it out is known as non-disclosure and may lead to insurers voiding policies and denying claims. It can also negatively impact a property owner’s chances of getting insurance in the future, and could cause premiums to skyrocket.
Will a standard home insurance policy cover Airbnb guests?
In a word – no! Airbnb arrangements or paying guests are not covered under standard home insurance policies, meaning your home cover probably won’t indemnify you if you have paying guests in your home via Airbnb.
If one of your guests had a personal injury – for example if they tripped and fell down your stairs – you’d be liable. Ensure you have adequate cover to protect your interests if someone is injured on your property.
Not all insurance companies are willing to insure rental properties, so if you plan to buy a property specifically to rent out, explore the insurance options before you buy. When looking for a quote, who you rent to will also affect the premium. Because you can’t control who books a short-term rental, the risks are harder to predict (unlike, say, if you rent longer-term to a family or students). This increases the risk overall, and therefore possibly the cost.
What risks do I need to insure against?
Damage to buildings and contents is the primary concern for landlords, and this is covered in all standard home insurance policies. But if you are renting exclusions may apply – for example, some providers don’t include theft cover if you have a lodger or paying guests. However, if you don’t tell your insurance provider that you are an Airbnb host, your cover may be invalid, so always keep them informed.
Cover for accidental damage can also be tricky when you rent out your property. Never leave high value items in the property when you rent it out.
Public liability is also a big risk when renting out your property. Claims can run to huge amounts of money, which will come out of your own pocket if you haven’t told your insurer that your property is on Airbnb. Trips, falls, trapped fingers and garden accidents are just some of the hazards to be aware of.
A simple step in protecting both your asset and yourself against claims is to have appropriate security measures in place. This includes fully functioning smoke detectors, fire extinguishers, and also providing an easily accessible list of emergency numbers.
How do I get the right insurance policy?
As the popularity of Airbnb rentals has soared, so specialist Airbnb insurance policies have become more readily available. Recognising this new market sector, many providers are offering bespoke policies including common risks such as loss of rent and damage. Airbnb themselves have insurance in place – Host Protection Insurance provides liability coverage to hosts, subject to certain limitations, so check with your insurance provider to see how it interacts with your current policy. You may still need additional cover to fill any gaps.
If you are thinking of starting out as an Airbnb host, it’s crucial that you consult your insurance provider first. The simplest way to get the cover you need at the best price possible is to contact an insurance broker such as Britton Insurance. They can advise you on the appropriate level of cover tailored to your own particular circumstances.