Renting out your home or setting up an Airbnb – make sure you’re protected

Holiday home insurance

Looking to let your second property, or set it up as an Airbnb? It can be a lucrative business – in London alone, the number of properties listed on Airbnb quadruped between 2015 and 2020[1], and the average London Airbnb listing charges £125 a night.

Airbnb has disrupted the hotel industry, and given holidaymakers and weekend trippers a different option – one that can give them greater privacy and space, more convenient locations, and the charm of a unique experience in a place someone else has made feel like home.

While opening your home (or second home) to a stream of strangers might not be everyone’s cup of tea, for a growing number of people it’s a great way to create additional income from your property.

The average host earns just over $9.5k annually, or about £7,356 in Britain, but if course this can vary widely depending on location, occupancy levels, and the size and desirability of the place[2].

When considering letting a property of any kind, whether long-term via an agent or as short-term lets on Airbnb or another platform, you have to consider your own security.

Standard home insurance isn’t suitable for a home that’s being let out, but bog-standard landlord cover might not always fit the bill for less traditional kinds of rental, either.

Do I need special Airbnb insurance?

There are, of course, companies out there which have been set up just to offer Airbnb insurance. And while you can go down that route, lots of holiday home insurance policies can accommodate your cover needs.

Holiday homes can have lots of different purposes, so it’s important to keep these in mind when setting up your insurance policy. Having a holiday home which you rent out to others will need a different type of cover compared to a holiday home you just keep for yourself, for example.

Whether your holiday home is for personal use or rented out to holidaymakers, you’ll need to have buildings and contents insurance in place. This will protect the building itself and contents from most types of accidental or malicious damage, including fire, theft or storm.

When you’re letting your property out to others, however, you’ll need to think about additional protection such as landlord’s contents cover and property owner’s liability.

  • Landlord’s content cover will provide cover towards the repair or replacement of furniture or appliances which are left in your property. Accidents do happen, so it’s important to make sure you’re not left out of pocket after holidaymakers leave.
  • Property owner’s liability insurance provides cover for legal expenses regarding landlords’ legal liability. This includes potential claims made against landlords or property owners for personal injury suffered by those visiting or staying on the property.

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I just own a holiday cottage – what kind of insurance do I need?

As mentioned above, you’ll need to think about the purpose of your holiday cottage when securing your insurance. If you’re renting out your property as a holiday home to others, you might want to think about getting holiday home cover which includes buildings insurance, landlord’s contents cover, property owner’s liability, and employers’ liability cover, among other areas of protection.

There are a number of additional cover options which you could consider, including for:

  • Accidental breakage of sanitary fittings, fixed glass, solar panels and ceramic hobs
  • Accidental damage to underground services which extend from your home to the public mains for which you are legally responsible
  • Loss of rent or alternative accommodation up to a maximum of 20% of the building sum insured, for a maximum period of 12 months
  • Communal contents cover
  • Emergency access to the premises

Another thing to keep in mind is unoccupancy. With many holiday homes, there are times throughout the year that your space may be left unoccupied, something which you’ll need specific cover for.

Many holiday home policies will include this, as long as the property is visited at least once every 30 days, either by you or a trusted representative. You should aim to keep a record of when the property was visited, as well as observations made at each visit, as this will be needed in the event of a claim.

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    Thinking of renting out your property? Talk to our helpful advisors or your personal client manager about your insurance needs, on 0121 248 9440.


    [1] Finder.com, July 2020

    [2] Ipropertymanagement.com, February 2022