Does home insurance cover Airbnb guests?

Renting out a room or your entire home has become a relatively quick and easy way to earn a little extra. But before you advertise your home on sites like Airbnb, Vrbo or HolidayCottages.co.uk, it’s crucial to find out what your home insurer has to say. To ensure you don’t get caught out by terms and conditions, here’s what to consider when it comes to home insurance and holiday lets.

Can I let my home out to paying guests?

Don’t assume you can rent out your home (or a room) to paying guests. That might sound odd – it’s your home after all, but if your property is leasehold or you have a mortgage, check your contract first.

If you live in a leasehold property, it’s highly likely there are rules about taking on paying guests. Similarly, your mortgage agreement may have conditions which mean you can’t rent out your property. Some mortgage lenders will allow you to take on lodgers or tenants if you’re also living there but this will depend on your lender and the conditions in your contract.

If you don’t follow the terms set out in your lease or mortgage contract, you could face serious consequences. For example, your lender might decide to withdraw the agreement and ask you to repay the loan amount immediately.

If you’ve bought a home with the intention of renting it out, you’ll need a buy-to-let mortgage and appropriate landlord insurance.

Will my home insurance cover paying guests?

If you can rent a room or your entire home, standard home insurance won’t be suitable. This is because standard home cover is designed for owner-occupiers, in other words, people who have bought the house to live in as their main residence.

As far as insurers are concerned, renting out your home to short-term guests carries all sorts of risks. For example, there’s a higher probability of your home being damaged or disgruntled guests may decide to sue you if they’re injured while at your property.

The point is, always check the terms of your home insurance contract. If it doesn’t cover paying guests, you’ll need to find specialist holiday letting cover that does.

What insurance do I need to rent out my home on Airbnb?

In the vast majority of cases, standard home cover just won’t do, and you’ll need specialist holiday letting cover (and to be covered for other mishaps, like Airbnb's insurance). To make sure you get the right cover, always discuss your needs with your insurer, for example, think about:

Buildings and contents cover

Buildings insurance covers the structure of your property so if you’re renting out a flat, you might not need this as it’s usually the freeholder’s responsibility.

Contents cover insures the items you provide in the property—such as furniture, bed linen, kitchen utensils and electrical goods.

Remember that contents cover also includes anything you store in sheds. If you don’t want guests to access these items (and cause potential damage) it’s best to keep outbuildings locked.

The types of people you rent to

If you have a high turnover of guests (for instance, if they’re professionals on business) accidental damage cover might be something to think about. If you mainly rent to holidaymakers and families, find out your insurer’s stance on pets. Pet damage caused by behaviours like chewing, scratching and soiling generally aren’t covered by insurance.

Insurers may also have limits on the number of guests you have to stay and often won’t provide cover for events like hen or stag weekends.

Public liability insurance

Public liability policies cover compensation and legal fees if a guest is injured or has their property damaged while staying at your holiday let.

Employers’ liability insurance

If you employ anyone to maintain your holiday let, you may need employers’ liability insurance by law. There are a handful of exceptions but if you need it and don’t have it, you face a £2,500 fine for each day you’ve been without it.

Alternative accommodation

This pays for your guests to stay elsewhere if something happens to make your let uninhabitable.

Doesn’t Airbnb have its own insurance?

Airbnb do provide some insurance but it’s vital you check what’s offered is enough for your needs.

For example, Airbnb provides ‘Aircover’ which offers up to $1 million for damage and a further $1 million in cases of liability. This works out at just over £750,000 which you could find falls short of your needs. We've seen it recommended that you have at least £2 million worth of public liability cover and some policies offer up to £5 million as standard.

Airbnb’s ‘host damage protection’ also has a number of exclusions so think carefully before relying on this as your only source of insurance. For instance, if a piece of art cannot be replaced, it won’t be covered. You also won’t be covered for ‘mysterious disappearance’ of your contents.

Is short term holiday let insurance the same as second home insurance?

No, short term holiday let insurance is specifically designed for anyone renting out property on a regular basis. Typically, this means you’ll have a relatively high turnover of guests (for example, every weekend). Policies take into account all the potential risks your property faces every time a new guest visits.

Second home insurance (or holiday home insurance) is tailored for homeowners who use the property now and again. These policies generally don’t cover paying guests and will cover the property if it’s empty for a longer period of time.

Compare home insurance that suits you

Airbnb home insurance can cost as little as £220 a year for a standard property with a £200,000 rebuild value. Whether you rent a second home or your own on platforms like Airbnb, it’s important to make sure your home insurance fits your needs. To help you find cover that suits you and your budget, we’ve teamed up with Quotezone to bring you a range of quotes from leading insurers.