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Reviewed by William Cooper
Since Airbnb first launched over 15 years ago, there has been a significant rise in the number of luxury short-term rentals available in response to the growing demand for unique and high-end travel experiences. With opportunities for personalised stays in prime locations, Airbnb attracts travellers looking for comfort and privacy.
Renting out a property via Airbnb has also become an increasingly popular way to generate extra income from a second home. In 2021, there were over 560,000 Airbnb listings in the UK. However, opening your property to strangers inevitably poses some potential risks, which is why you need Airbnb insurance to protect your property.
If you’re considering short-term rentals on an existing property or buying a second home to use as an Airbnb, you need the right insurance coverage to protect your home and belongings. High-value home insurance can protect your Airbnb from property damage and theft.
In this guide, we’ll explain the benefits of having high-value home insurance for Airbnb properties.
Why do Airbnb hosts need high-value home insurance?
Standard homeowners’ insurance may not cover the unique circumstances of short-term rentals. Fortunately, high-value home insurance provides comprehensive insurance that can protect your second home and assets against the potential risks from Airbnb short-term rentals.
Here are some of the areas that high-value home insurance can cover for Airbnb hosts:**
- Extended replacement cover: If the general contents in your Airbnb has increased in market value since you took out insurance, you can claim up to 125% if it is lost, stolen or accidentally damaged.
- Damage to appliances: Guests may accidentally damage expensive appliances, including washing machines, dishwashers, ovens or refrigerators. High-value home insurance can cover the repair or replacement.
- Broken furniture: Sofas, beds, tables and chairs can get broken, either accidentally or through heavy use, requiring repair or replacement. If you have high-value home insurance covering your Airbnb home, you could claim the cost of replacement or repair.
- Structural damage: Accidents can cause damage to walls, floors or ceilings of the property, which can become a serious issue if not addressed. Your high-value home insurance can cover the repair cost and provide temporary accommodation and/or loss of earnings cover for your guests during repairs.
- Theft or vandalism: High-value items such as artwork, jewellery or even golf clubs left in the Airbnb can be vandalised or stolen. High-value insurance can either replace or provide a cash settlement for these items.
- Loss of income: If the Airbnb property becomes unusable due to extensive damage, you will inevitably lose income. Insurance coverage can reimburse you for this lost revenue under certain circumstances.
- Fire and water damage: Plumbing leaks, kitchen fires, floods and natural disasters can cause extensive and expensive damage. Repair costs and replacement of damaged items can be covered by insurance.
- Emergency repairs: Insurance can cover urgent issues within the property that require immediate attention, such as a broken boiler during winter, which can be expensive.
- Legal expenses: If a guest decides to take legal action against you for injury or damages that occurred at your Airbnb, the legal fees alone can be expensive. High-value home insurance can cover up to £150,000 for legal expenses, court fees and settlements.
- If the Airbnb property is not your main residence, then you would need to add the Airbnb property as a second property to your high value home insurance to benefit from the legal cover.
- Identity theft and cyber cover: If sensitive information about yourself is compromised due to a cyber-attack or security breach, insurance could cover up to £100,000.
** (Cover availability depends on the circumstances of your Airbnb hosting alongside the quality of your insurance product. Below is a list of all the available coverage but you may not benefit from them on your policy, so please consult your own policy wording).
Does Airbnb provide its own insurance for hosts?
All Airbnb hosts are automatically covered by Airbnb’s AirCover, which replaces its previous offerings, Host Guarantee and Host Liability Protection.
Airbnb are registered by the Financial Conduct Authority, however their AirCover product is not an insurance policy and is not covered by the Financial Conduct Authority. But it does provide the following coverage:
- Host liability insurance*: If an Airbnb guest is hurt accidentally while staying at the property, their personal belongings are stolen, or a guest causes damage to the property, hosts can claim from Airbnb.
- Host damage protection: Should a host lose income because of a cancelled booking or incur unexpected cleaning costs, they can claim from Airbnb.
- Experiences liability insurance: If the host causes damage to a guest’s possessions or accidentally hurts them while they are on the property, they can claim from Airbnb.
However, hosts only qualify for AirCover when guests stay at their property and it doesn’t cover damage caused to the property by natural disasters and theft of a host’s belongings. It also doesn’t address high-value property issues or provide comprehensive protection.
Airbnb hosts should not rely solely on AirCover as this could leave them vulnerable and inadequately insured. In fact, Airbnb suggests that hosts should arrange their own insurance to cover their property.
*Airbnb host liability insurance is underwritten by Zurich
What doesn’t Airbnb AirCover, cover?
While AirCover offers some protection to hosts for losses caused accidentally by a guest or an invitee of a guest, it may not cover to the full extent of high-value home insurance policy.
There are many things that Airbnb may not cover that hosts should be aware of, such as:
- Damage caused by someone other than your guest.
- Damage caused by a natural event such as a heavy storm.
- Standard property wear and tear.
- Damage caused by a guest after their booking period ended.
- Losses over the cover limit.
- General perils such as a subsidence, flood, landslip or heave.
- Loss of earnings due to the property remaining vacant.
- Any damage or injury that occurred outside of the property.
- Legal expenses.
- Plus many others.
For peace of mind that you have appropriate protection for your Airbnb property and yourself as a host, you should consider supplementing Airbnb’s AirCover with high-value home insurance.
An insurance broker such as Stanhope, which is familiar with Airbnb rentals, can help you find the right coverage for your needs. Our insurance brokers will use their extensive market experience and industry knowledge to help you find the most suitable high-value home insurance provider for your Airbnb.
How can high-value home insurance protect my Airbnb?
High-value home insurance offers comprehensive protection for your home when it’s used as an Airbnb. It goes beyond what is traditionally covered within a standard homeowner’s insurance policy. Here’s how high-value home insurance can protect your Airbnb:
- Extended cover: With no upper limit, high-value home insurance typically provides no cap on the maximum cover coverage for your contents, valuables or fine art within a property used for Airbnb usage.
- Property damage: Guests may accidentally damage the host’s property, whether it’s furnishings, appliances or the actual building. High-value insurance policies can provide cover for repairs or replacement of these items but this depends on any endorsements applied – check your wording!
- Multiple Airbnb cover: For hosts with several Airbnb’s in the UK, it’s possible to put them all on the same high-value insurance policy, subject to insuring your main home with them, too.
- Employer liability: Provides insurance protection for hosts should an employee, such as a gardener or cleaner, be injured on the property as a result of your negligence.
- Valuable items: Hosts receive either a replacement or cash settlement if valuable items are damaged or stolen such as a painting or sculpture.
- Home emergency cover: Urgent property maintenance and repairs can be covered for up to £2,000.
- Legal expenses: Can cover up to £150,000 of legal costs.
- Liability: Can cover hosts should a guest become injured while staying at the Airbnb property due to negligence.
- Loss of rental income: If you lose out on rental income while your Airbnb is repaired, some high-value home insurance may reimburse you for lost income or pick up the cost to re-house the guests.
Can I add my Airbnb to my existing high-value home policy?
Most standard home insurance policies may exclude using your home for commercial activities; in contrast, many high-value home insurance providers may allow you to add your Airbnb rental to your property insurance policy.
It is important to check whether there are any exclusions regarding certain types of damage related to short-term rental, so, be honest with your insurer about your Airbnb plans; otherwise, you risk invalidating your insurance.
With Stanhope’s high-value home insurance options, you can add multiple homes in the UK to the same high-value buildings and contents policy. Here are some key requirements for incorporating your Airbnb into your high-value home insurance policy:
- Occupancy: You must inform Stanhope whether you (as the host) will occupy the property during guest bookings, as this will affect the risk assessment and coverage details.
- Which home you are using: You’ll need to let your insurer know which property you rent as an Airbnb, which can impact the policy terms. Or, if you’re using your main home for Airbnb guests.
- Number of guests: Your insurer must be informed of the maximum number of people that can sleep at the property during a booking.
- Number of bookings: Your insurer must be informed if you accept multiple bookings from different parties at the same time.
- Estimate number of booking days: Your insurer will need to know how many days per year the property will be occupied by Airbnb guests.
- Access to facilities: Your insurer will want to know if guests can access on-site facilities such as a swimming pool, tennis court, hot tub, etc.
- Estimated turnover: Your insurer will need to know the estimated annual income you anticipate generating through Airbnb rentals.
What occupancy status should I list my home as if it’s being used for Airbnb?
When talking with an insurance broker, you must notify them whether your property is your primary and permanent home or used primarily as a holiday home. But what do you do when it’s used for Airbnb purposes?
When to state the property as a holiday home.
When to state the property as a main and permanent home.
Get a quote now
I contacted Stanhope to obtain a quote for home insurance. While I anticipated paying a higher premium compared to purchasing a policy through a comparison website, Stuart diligently assisted me in finding an exceptional home insurance policy that provides comprehensive coverage for various eventualities. Remarkably, this policy was over £500 less expensive. Although I hope we never have to file a claim, I am grateful to Stanhope for ensuring that we are fully protected should the need arise.
Mohan Rana 5 Star Review ReviewsIO
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