The ultimate guide to short term let and Airbnb insurance - Total Landlord Insurance

June 17, 2021
Total Landlord Insurance
The ultimate guide to short term let and Airbnb insurance - Total Landlord Insurance

The trend in short term and holiday lets via sites such as Airbnb, Sykes and Cottages4You has soared in recent years and is set for a new surge as COVID-19 measures are relaxed. If you’re a landlord who’s already decided that flexible short term lets are the way forward, or if you’re about to dip your toes in the Airbnb water, then you’ll need to make sure that you’ve got all your ducks in a row. Your first steps are to check that you’re not in breach of your buy to let mortgage conditions, and then to arrange some effective short term or holiday let insurance.

Our guide explains what you need to know.

Does my insurance already cover Airbnb home rental?

Standard home and most landlord insurance won’t give you the cover you need for letting a property via Airbnb. You’ll need to have a dedicated specialist short term let insurance policy to make sure that you’re fully protected.

Are short term lets and holiday homes covered by my insurance?

Don’t assume that the insurance you already have will cover you. Contact your insurance company to find out, as you may need to find a dedicated insurer if they can’t help you. Without the right kind of cover any future claim would be invalidated, leaving you out of pocket.

What about my granny annexe?

A granny annexe may be attached to your house but you’ll still need specialist insurance if you’re going to rent it out.

Doesn’t Airbnb insure you for free?

We’re often asked about both Airbnb host guarantee and Airbnb protection insurance. What are they, and do they cover you for every possibility? Here’s an explanation.

Airbnb host guarantee

Airbnb automatically provides a ‘host guarantee’ but this is neither an insurance policy nor a replacement for short term let insurance. It’s a property damage protection programme with limitations, providing cover of around £700,000 (though it’s not clear if this is per property or for every property worldwide).

What if I need to make an Airbnb host guarantee claim?

In the first instance you’ll need to make a claim against your guest via your existing host insurance before submitting a claim to Airbnb. Any successful insurance claim will be deducted from the host guarantee, so it’s not something you should rely on.

Airbnb host protection insurance

Airbnb also automatically provide ‘host protection insurance’ providing cover of around £700,000. It’s public liability insurance, so covers you if a guest gets hurt or if their belongings are damaged within your property during their stay. Beware that it does not cover all liability types.

What is not covered within Airbnb host protection insurance?

  • Assault within the property
  • Loss of income
  • Damage to the host’s property or belongings

What if a burglar assaults one of your guests?

If this happened, the guest could sue you. You would be liable for legal expenses, and if you were proven to be at fault due to the security of the property, then you’d also have to cover injury claims, which could total hundreds of thousands of pounds. This wouldn’t be covered by Airbnb host protection.

Do you need specialist ‘Airbnb insurance’?

As you can see, there are gaps in the Airbnb guarantee and host protection insurance which you need to fill in order to protect yourself and avoid financial risk. As not all property damage caused by guests or types of liability will fall within their terms, it’s vital for owners to take out a holiday home insurance policy that provides comprehensive host insurance for short term rental, holiday or Airbnb agreements.

What would specialist holiday home/short term let insurance cover?

Hamilton Fraser provides a dedicated policy for Airbnb, short term and holiday lets. Here are just a few examples of what would be covered:

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Accidental damage

Wine is spilt on your sofa or an expensive granite worktop in your kitchen is damaged accidentally. Available for an additional premium.

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A careless guest accidentally sets fire to your holiday home, short term let or Airbnb. Our insurance would cover a complete rebuild or replace all your contents if you have chosen to include this cover.

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Theft by guests

For an additional premium of just £35 you can cover yourself for up to £5,000 in the event of a guest deciding to help themselves to your expensive TV, garden furniture or audio equipment or any other expensive items provided in the property for the luxury of your guests.*

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Malicious damage by guests

The £35 additional premium also covers you if you are unfortunate enough to have some undesirable guests who decide to trash your property before they leave or throw a party where their mates decide it would be fun to slash the sofa, pour red wine over your carpet or put their foot through your glass patio doors.

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A guest falls and hurts themselves in your property due to a fault with the equipment/furniture you have supplied, such as a chair collapsing or the guest tripping over some loose carpet. Another example would be where a guest injures themselves on a faulty electrical appliance.

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A storm damages your roof, so your guests have to be relocated.

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Loss of rent

If your property is uninhabitable following an insured event, we provide loss of rent up to 20 per cent of the sum insured.

We can offer a tailored UK holiday home insurance policy that can provide comprehensive cover for short term lets (with a minimum premium of only £115 pa), and for an additional £35 covers £5,000 of malicious damage cover or theft by a paying guest, something which isn’t offered by the majority of insurance providers.

And if you’re an existing Total Landlord Insurance, Hamilton Fraser Cosmetic Insurance or Landlord Action customer or Property Redress Scheme member, you can get 20 per cent off our holiday home insurance policy. For more information call our team on 0345 310 6336.

The higher level of cover provided by specialist insurance for your short term let or Airbnb will mitigate your risks and give you the peace of mind that you are prepared whatever might happen.

*This would be covered for a short-term holiday let but not for an Airbnb let.

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