Festival Lets: Have You Told Your Household insurer?
By Alexandra Richards, Private Clients Development Executive
The Edinburgh Festival Fringe is now in full swing with thousands of visitors coming from across the world to enjoy the huge range of events. Many homeowners take this opportunity to provide accommodation to revellers by renting out a room, or the whole house or flat. This is usually done via Airbnb, private agencies, personal adverts, or word of mouth.
Whichever way, if you are renting out your home, in part or in full, you must let your insurer’s know about it. Not doing so could invalidate your home insurance policy should you need to make a claim.
Renting out your home is a material change to the risk. This is understood as a substantial and continuing change that affects and increases the risks involved with insuring your property. Most standard household insurance policies don’t provide cover for paying guests as the insurance is partly based on how many people live in the property and the properties usage. The risk to your property increases if you rent it to the paying public, even if you live there whilst renting it.
If you don’t inform your insurer and something goes wrong, they may not pay the claim. For example, if a guest suffers an accident at your home and you're held responsible, the costs could run into thousands. Settlement of which would have to come out of your own pocket if your insurer refuses the claim.
This varies from insurer to insurer so it is important you discuss this with them so that you're aware of any impact on your policy. Some examples of what could happen are:
• An additional premium charged for the increased exposure to the property.
• A ‘let holiday home’ clause applied which will place some restrictions on your cover.
Airbnb does provide Host Protection Insurance to provide cover for you as the host against claims from guests during their stay. Yet, there will be exemptions between different properties, so it is important that you make sure to check these. Airbnb also provides a £600,000 Host Guarantee to protect your home against accidental damage from a paying guest. Yet, this guarantee does not cover everything, and again there are exclusions. It's important to always let your insurer know that you're renting out your home, and ensure it always has adequate insurance cover.
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