A standard home insurance policy is not appropriate for holiday lets as most home insurers won’t cover properties that are commercially let or left unoccupied for long periods.
This guide provides an overview of the insurances available and what they generally cover.
- Buildings Insurance covers the main structure of your holiday let and its permanent fixtures and fittings, such as the roof, walls, floors, ceilings, fitted kitchen or bathrooms if they are damaged. Garages, outbuildings, swimming pools and sheds should be covered too.
- Contents Insurance covers your personal belongings such as furniture, kitchen appliances, electricals, soft furnishings and carpets if they’re damaged, lost or stolen.
- Accidental Damage covers damage to your holiday let and its belongings against everyday mishaps from guests. For example, spilling red wine on your carpet or a smashed window. Damage by pets or malicious damage is covered also.
- Alternative Accommodation covers costs if your guests have to find somewhere else to stay due to damage covered by your policy.
- Employers’ Liability Insurance is a legal requirement if you employ staff such as a cleaner or gardener. It covers your legal liability if they sustain an injury or illness.
- Legal Expenses covers legal expenses (up to a limit) where legal advice is needed. For example, eviction of overstaying guests, property disputes and tax protection.
- Loss of Rental Income to protect your earnings if you cancel bookings due to insured perils.
- Public Liability Insurance covers legal costs and expenses if someone suffers an injury or dies while staying in your property.
- Theft covers theft by guests. Some policies do not to cover theft where there’s no sign of forced entry.
Reservations from Airbnb
Airbnb offers hosts their AirCover for Hosts which includes Host Damage Protection and Host Liability Insurance.
Host Damage Protection protects your place and your belongings if they are damaged by a guest during an Airbnb stay.
What is covered?
• Damage to your home, furnishings, valuables or belongings caused by guests (or their invitees)
• Damage to parked cars, boats or other vehicles caused by guests (or their invitees)
• Extra cleaning costs required to remove stains left by guests (or their invitees) or pet accidents, smoke odour removal, or when required due to additional unapproved guests
• Income lost if you need to cancel confirmed Airbnb bookings due to damage caused by a guest (or their invitees)
When you offer an emergency place to stay through Airbnb you’re still covered by Host Damage Protection.
What is not covered?
• Damage from normal wear and tear
• Loss of currency
• Loss due to acts of nature (example: earthquakes and hurricanes)
• Injury or property damage to guests or others (those may be covered by Host Liability Insurance)
• Cleaning associated with normal checkout tasks (example: laundry, dishes or rubbish removal)
Host Liability Insurance protects you against claims if a guest gets hurt or their belongings are damaged or stolen during an Airbnb stay.
What is covered?
• Bodily injury to a guest (or others)
• Damage to or theft of property belonging to a guest (or others)
• Damage caused by a guest (or others) to common areas, such as building foyers and nearby properties
What is not covered?
• Damage or injury resulting from something done intentionally
• Damage to your place or belongings caused by a guest (that’s covered by the Host Damage Protection)
Reservations from Booking.com
Booking.com offers hosts their Partner Liability Insurance which protects you against third-party lawsuits or liability claims for bodily injury or property damage incurred during the dates of a reservation made through Booking.com.
What is covered?
• Bodily injury (e.g. if your guest breaks their arm slipping in the shower and holds you responsible.)
• Third-party property damage (e.g. if your guest accidentally leaves a tap running and causes water damage to your neighbour’s apartment below)
What is not covered?
• Damage and/or harm caused by pets (e.g. your guest’s dog injures a neighbour)
• Your own personal injury (e.g. you break your arm tripping over a step at the property)
• Damage or injury from something done intentionally (not an accident)
• Your own personal property (e.g. a guest breaks your TV or table)
Things to Consider
Unfortunately, insurance doesn’t cover every eventuality. You should make sure you read your holiday let insurance policy document in full before purchasing so you know what will and won’t be covered.
While you want to keep costs down, you also need the best cover possible. You must ensure you have the right cover so that ultimately – your claim gets paid
Key points:
• Buildings insurance will not cover general wear and tear and routine maintenance.
• When it comes to buildings insurance avoid underinsurance, it’s important to ensure the sum insured is enough to cover the total cost of reinstating your holiday let. Failure to insure for the full reinstatement value could result in the claims settlement being reduced.
• When it comes to insuring your contents, think about how much it would cost to replace all the items in each room on a new-for-old basis.
• Contents insurance will not cover breakdown of household appliances and guests’ possessions aren’t typically covered by contents insurance.
• For contents insurance single items are only covered up to a certain amount.
• When it comes to insuring your contents, think about how much it would cost to replace all the items in each room on a new-for-old basis.
• If your holiday rental is pet-friendly ensure you are covered as very few insurers will cover damage caused by pets.
• You can’t guarantee that guests will lock external doors and windows at night or when they go out, so ensure your insurance covers theft by ‘non-forcible entry’.
• If you use a keysafe to store keys for guests, check any if endorsements apply.
• Check for any security measures required, such as specific locks. Failing to implement the required security is likely to invalidate theft claims.
• Is theft by paying guests covered? Most insurers exclude it as standard.
• It’s the guests responsibility to take out travel insurance to cover their possessions whilst at your holiday rental.
• How much loss of rent is covered, it’s usually a % of the sum insured or a specified amount.
• What unoccupancy clauses, winter warranties and restrictions apply which could invalidate your insurance? How often do you have to inspect your holiday let when it is empty? Do you have to leave the heating on to maintain a minimum specified temperature or turn the water off and drain water tanks/pipes when no one is occupying the property?
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