Short term letting has become increasingly popular, especially with the birth of platforms such as Airbnb that allow people to easily market their properties. This is fantastic but it also poses some challenges for necessary auxiliary products and services that come with property ownership, such as insurance. At the heart of the matter is short letting of a residential space no longer neatly falls under either purely residential or commercial classification as it is a mix of both.
Property insurance has been around for donkey’s years and for good reason to provide proper protection against a variety of unwelcome events. The issue is many home insurance products for residential properties may only provide partial cover or none at all for properties used for short term letting. Some do and its best to check with your insurer to understand what exactly is covered.
Here are some steps to help you check you get adequate coverage:
1.Make sure you have insurance in place for when guests are not staying
Having insurance in place to protect you when you don’t have guests to stay is just as important as having insurance in place when you do.
2. Tell your insurer what you’re doing
I know this sounds worse than the worse kind of household chore but there will always be a requirement that your everyday insurer knows what you’re doing. Pick up the phone, rather than sticking your head in the sand, and speak to them.
3. Read don’t just listen to what your insurer tells you
If your insurance company tells you they do cover you then read the small print in your policy as they may only cover you for so much rather than for everything you need.
4. Don’t panic if your insurer does not cover you for a short term letting
The vast majority of residential home insurance look at having paying guests to stay as a commercial activity and it will consequently compromise or completely invalidate your cover.
The good news is things have evolved and there are several specialised home sharing policies available to you as well as some coverage from some of the short term lettings platforms.
The leading short lettings platform Airbnb offers an ‘Airbnb host guarantee’ policy for damages up to £600000. However, this does not provide comprehensive coverage and is aimed mainly at helping only with certain instances of guest damage. The other thing to be aware of is it’s the Airbnb insurance policy that they apply at their discretion.
As property management specialists for short term lettings, we would recommend getting your own specifically designed insurance product that covers you for all the risks created by having guests in your home (malicious damage, accidental damage, theft by the guest, unforced entry, public liability etc.).
There are several insurance policies available for short term lets and we would like to recommend Guardhog, several of our hosts are using them and are very satisfied. They have tried to make the policy simple to use and easy to put in place. They don’t need to replace your existing insurance and work on a ‘pay per stay’ basis so you only pay for insurance when you actually have guests to stay.
If you would like to find out more information about their products and contact them you can visit their website at Guardhog.com.