Becoming an Airbnb host is increasingly popular in the UK. Homeowners let a room in their house, an entire property, or unusual accommodation on their grounds, such as a caravan or converted outhouse. Airbnb is estimated to have contributed around 12,000 jobs and over £500 million in economic activity to the UK economy.
Airbnb - what happens when things go wrong?
Although home insurance usually covers family and friends visiting your property, it can be a different matter entirely if you invite paying guests into your property. It’s best not to offer accommodation on Airbnb unless you are clear about your insurance and the level of risk you are taking.
Airbnb’s host insurance
There is some cover which is provided by Airbnb for hosts, but this is not comprehensive. The company offers up to £650,000 cover for damage which occurs during an eligible booking. This covers you if your guest claims for personal injury or damage to their property during their stay.
However, the cover offered by Airbnb does not include damage to or theft of your own property, or personal injury caused to you or your family. Although Airbnb’s review system should help weed out dodgy guests with light fingers, you can’t be 100% sure a paying visitor won’t drop a suitcase on your foot or make off with your jewellery collection.
Are you eligible to host?
Before becoming an Airbnb host, you should double check that this is permitted under the terms of your mortgage, and/or lease and insurance policy. Many mortgage agreements state that subletting the property will invalidate the mortgage, while insurers often exclude cover for paying guests, even if long-term tenancies are permitted.
Letting a property through Airbnb could also bring problems if it makes a property into a house in multiple occupation (HMO). Some local authorities require a licence to let an HMO and there are additional regulations that apply to issues like fire safety. Failure to comply can be penalised with a fine of up to £20,000.
Additional Airbnb insurance cover
What kind of additional cover might you purchase before hosting paying guests?
- Liability insurance
Airbnb provides limited cover, but this will not offer protection for all claims. For example, if you live in a property with shared hallways or corridors, Airbnb would not provide cover for injuries in these areas. Check whether cover would be provided and purchase additional insurance if necessary.
- Loss of income
If you rely on paying guests to help pay the bills, you could find yourself in difficult circumstances if, for example, a water leak means your accommodation is uninhabitable for a time. Loss of income insurance helps you bridge these gaps.
- Home contents insurance
Even if your guests are impeccably well behaved, it’s easy for things to get broken or damaged during a visit: think red wine on new cream carpets, cigarette burns on furniture and smashed ornaments. Some home insurers will refuse cover for damage caused by paying guests, or for accidental damage. Check what is included in your policy.
- Buildings insurance
Your buildings insurance might cover you for storm damage, but would it cover damage to guests’ property, or damage to your rental accommodation? Make sure you are covered.
Do you need extra insurance protection for your Airbnb activities? Why not ask Computerquote to help?