Airbnb is one of the biggest successes of the sharing economy with more than four million homes currently listed to rent on the site.
But while letting out your property may give your income a welcome boost, there is a danger that every time you have a tenant you are voiding your home insurance.
Many people who let their homes these days often do so for a day or two at a time.
But typical contents insurance – and even landlord insurance – policies won’t necessarily pay out if you make a claim on damage caused while you were letting your home out short term.
Inlet is a new insurer offering short-term top-up home cover to those using Airbnb
It’s possible to get more comprehensive cover that allows you to rent out your property some of the time or covers you if you have tenants who sublet.
But these policies tend to be more expensive – particularly as you’re paying for cover all year that you may only need for a few days here and there.
Enter Inlet, a new insurer that is offering short-term top ups to those using Airbnb.
The company has launched with four types of top up. Host insurance provides cover for homeowners, tenants and landlords for the letting of rooms, annexes and whole houses.
House swap cover is for homeowners and tenants who are house swapping.
There’s also a policy designed specifically for landlords to protect themselves should tenants sub-let their property, with or without their knowledge.
And the firm is offering cover to people letting their garage, driveway or allocated parking.
Louise Birritteri, chief executive of Inlet, said: ‘The sharing economy has really taken off in the past couple of years but what people don’t realise is, in most cases, their standard home or landlord insurance policy won’t cover them for losses or their liability for these types of short-term letting activities.’
How does it compare?
Don’t make the mistake of thinking your existing home insurance policy will cover you while you let out your home. Theft and accidental damage are typically left out of most contents policies.
This doesn’t mean you shouldn’t tell your insurer if you’re thinking about putting your place on Airbnb though. You should officially tell your insurer and it’s imperative to check with them what the terms and conditions of your policy are.
It may be you can let through Airbnb provided you take a top-up policy out with your existing insurer – often on an annual basis that can prove costly. But some providers will allow you to increase your cover on a short-term basis and you’ll either be charged a one-off fee or your premium will be increased.
At the moment, InLet’s standalone top-up policy is unique in the insurance market.
However, Airbnb provides its own limited cover through its host guarantee that covers those renting out their homes for up to £650,000 worth of damages.
But there are several important elements missing from the guarantee such as cash and securities, pets, personal liability and shared or common areas.
There are also limits on the amount of cover for valuable items such as jewellery, collectibles and art work and it won’t cover for reasonable wear and tear.
And Airbnb is very clear that its host guarantee isn’t an insurance policy – the firm recommends you take out your own separate cover.
What’s the cost?
Inlet’s add-on products charge from £1.50 a day for cover if you’re letting out a room or your home – and around £1 a day for parking space insurance.
Paying by the day can get expensive quite quickly, so the firm is also offering packages for 35 and 90 days, as well as full-year cover – with prices dependent to your individual circumstances.
Birritteri said: ‘Our aim is to make sure people only pay for what they need, at the most appropriate price, so they don’t end up wasting some of the valuable income they earn from asset renting on insurance they don’t need.’
Inlet has designed its insurance to run alongside standard home and landlord policies on offer from any insurance provider, allowing you to shop around for the best deals for both your standard and shared economy cover.