It is becoming increasingly popular to sign up as a Host on sites like Airbnb to boost your household income or increase your revenue if you are a landlord.
It’s no surprise as you can potentially make thousands a year by letting your home, or spare room, through Airbnb and other similar sites. In fact, you can earn up to £7,500 tax-free each year from letting a spare room or your whole home (if it’s your main residence), under the Government’s Rent a Room scheme.
Did you know that your home insurance policy will likely not cover you for claims made though?
Have you checked if your Home Insurance covers you if you rent a room in your house on a short-term basis? Or is your rental property covered for week-by-week holiday lets under your Landlord Insurance?
Most standard home policies are not designed to extend cover for this, and most would specifically exclude theft unless it’s by forced entry. Most home policies would also exclude business activity from the home other than clerical work, unless you have a “business from home” policy where you have fully disclosed your business activity.
Even though a landlord policy is designed for lettings, you will find that on most basic policies your tenants are required to sign a minimum six-month lease. Therefore, without evidence of a long-term lease insurers could reject a claim and void your policy.
Bear in mind that some insurers will invalidate your whole home insurance policy if you don’t tell them about renting out your home – even when you don’t have Airbnb guests staying.
If your insurer isn’t geared up for short-term lets, and if you have failed to disclose that your property will be used for this purpose (whether that is the whole property or your spare room), then it is highly likely that any claim you make will be declined.
As your policy is null and void without full and proper disclosure, this means that your insurer may also reject any claim that is completely unrelated to your let – such as storm damage.
While Airbnb provides you with some protection under their agreement with you, there are many limitations and exclusions, such as cash and securities, high value items like jewellery, and personal (or public) liability if a guest gets injured.
It is wise to get your own insurance policy to ensure a good level of protection.
It is vital to protect yourself, and your property, correctly
Every property owner considering Airbnb should have an insurance policy specifically designed to include the extra protection you need for the increased risks your property will be exposed to when letting on a short-term basis.
Such areas include:
- property damage
- losses
- personal liability claims
Read: Government guidance on fire safety laws when you have paying guests.
Whilst there are many insurers that are not keen to cover properties providing short-term lets, we have access to a select number of insurers that offer this specialised cover at reasonable premiums.
There is then no need to buy additional “host” cover on top of your home or landlord policy as you will already be fully insured.
At Alexander Swan, we are specialists in finding insurance for niche cover and hard-to-insure properties. So, if you are considering Airbnb, then talk to us about your insurance policy.
