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What you need to know about Airbnb insurance coverage

What you need to know about Airbnb insurance coverage
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With Airbnb it’s easy to make some extra cash on the side by renting out your spare room or home. But just how protected is your property?

Here, we take a closer look at Airbnb’s Host Guarantee and Host Protection Insurance and what it means for you.

What is the Airbnb Host Guarantee?

Crucially, the Host Guarantee is not an insurance policy (the clue’s in the name). It does cover damage to your property, but it’s more of a goodwill gesture by Airbnb, and cover is limited to $1 million (about £780,000).

Under the guarantee, you’ll be compensated if your property or possessions are damaged by a paying guest during their stay. However, there’s a whole host of exclusions (things that aren’t covered) such as:

  • Money or currency in most forms (including any gold bullion you’ve got stashed away)
  • Items classed as rare or historically valuable like antiques (including antique jewellery and furniture), paintings or expensive rugs
  • Damage caused by animals, including pets
  • Damage to communal areas
  • Excessive use of utilities including electricity (if guests run up a huge bill, you’ll be the one paying for it)

Some exclusions are also rather ambiguous. For example, you won’t be covered for ‘mysterious disappearances or unexplained loss of inventory’, but there’s nothing in the Airbnb terms and conditions to nail down what those ‘mysterious circumstances’ might be.

What is Host Protection insurance then?

Unlike the guarantee, Host Protection Insurance (HPI) is an insurance policy, and it covers you for liability. In other words, you could make a claim for legal costs if someone blames you for injury or damage, for instance if:

  • A guest is injured at your property during their stay – for example, if they tripped on a rug, broke their ankle and decided to sue you. 
  • A guest accidently injures a member of the public in a communal area (like a building foyer) and the injured third party takes you to court.
  • Someone else sues you because their property has been damaged as a direct result of an Airbnb stay – for example, if a guest accidently caused a flood that also affected a neighbouring property.

Like the Host Guarantee, HPI comes with a number of exclusions. The main one to be aware of is that you’re not covered for damage you ‘should have expected to happen’. Similar to the case of ‘mysterious disappearances’ there isn’t much to clarify the situations in which you might expect damage, apart from a brief mention that anything done deliberately isn’t covered.

HPI also limits cover to $1 million and, importantly, it only covers incidents directly related to an Airbnb stay. So, if a workman was injured on your property and took you to court, HPI wouldn’t pay your legal fees.

Does my home insurance cover my Airbnb rental?

The short answer is: it depends. Some policies may include limited cover, but generally speaking, the average home insurance policy is unlikely to give you the protection you need if you rent to a constant stream of paying guests.

And it’s definitely best not to keep schtum about your Airbnb gig on the side. Failing to disclose the fact to your insurer could invalidate your home insurance altogether.

So, what insurance do I need to protect me and my stuff?

If your home insurance policy doesn’t include cover, your insurer might be willing to extend it so that it does. If it’s an absolute no-no from them, you can buy top-up cover from other providers to fill in the gaps. Insurance intermediary Pikl is just one example. 

If you’re not keen on the idea of top-up cover and regularly list a room or property on rental sites, there are several mainstream insurers who now offer Airbnb cover as an additional feature alongside standard home insurance.

Well-known providers offering this include Admiral, Towergate and Home Protect. It might also be worth checking out quotes on comparison sites. Most will give you the choice of searching or filtering for policies that include Airbnb cover.

But do I really need extra insurance?

That’s really down to you and your circumstances. While there are numerous exclusions with the Host Guarantee and HPI, it might be all you need if you only occasionally rent out a self-contained property.

If you’re renting out your whole home or a room in your home with access to all of your things, you may want the reassurance of a more robust policy instead.

Whichever route you go down, remember to tell your insurer you’re Airbnb-ing and always read the small print. It’s there for a reason.

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