Renting out your home on AirBNB? Are you covered?

Will your home insurance cover you for guest disasters?

Spilled wine on carpet
Renting your home out through Airbnb has become so popular that many people assume it's entirely safe. They don't stop to think whether they would be protected if something was to go wrong and their property got damaged. Complete destruction is thankfully very rare, but accidents do happen, so you need to know the risks - and ensure you are fully covered.

There have been some pretty scary headlines about people who rented their home out and paid a horrible price. There was Christina McQuillan, whose garden flat in London was damaged by revellers after her guest threw a New Year's Eve party. She returned to the flat after being contacted by her furious neighbours, and as well as finding people having sex and taking drugs, she found around £3,000 worth of damage, including a TV ripped off the wall.

Nigel Broome also let out his recently renovated home in south east London over the New Year. Among the damage the revellers caused were a flooded kitchen, holes punched in the walls and a window ripped from its hinges. He estimated the total damage at more than £12,000.

Thankfully stories like this are not common, but damage can be caused on a smaller scale, and sometimes making a claim for compensation hits a brick wall. Rachel Brown rents an apartment in central London through Airbnb. Student Rachel claims one guest damaged the smoke alarm in her bedroom and then ripped it off her wall. The guest was adamant it wasn't his fault and refused to pay for it. When Rachel tried to claim compensation through Airbnb, they didn't pay out due to lack of evidence.

Airbnb offers cover for up to £650,000 worth of damages, and there are plenty of examples of where it has paid out. However, it makes it clear that this isn't an insurance policy, and people should also get cover themselves.

No cover

Your usual home insurance will cover damage, but only if the insurer knows you are renting out the property, and has agreed to cover you. One issue is that people don't read the small print that excludes paying guests, so have no idea they're not covered. Jean-Baptiste Limare, head of sharing economy at Admiral said: "There's a lot of confusion amongst homeowners as to how renting out a room could affect their home insurance. This is understandable as most insurers don't cover renting out a room in this way, so you could risk your insurance being invalid and not being able to make a claim if the worst happened."

Even if you know about the rules, and you call your insurer to arrange cover for your paying guests, you face the problem that many insurers don't cover them in any circumstances. You can get insurance from a specialist, but this will tend to come at a higher price.

One new option on the market is an add on for Admiral policies - called Admiral Host. You can arrange to add it to your policy over the phone, and under the cover you can let out your home for 90 days through Wimdu, onefinestay and Homestay as well as Airbnb.

It includes up to £5,000 cover for high risk items such as jewellery, artwork and tablets. Admiral will also make the claims process easy, customers who want to make a claim only need to call Admiral who will take care of the rest; they won't have to try and resolve the issue directly with the guest or try and claim compensation through the website.

Whatever option you go for, it's always worth checking whether you have insurance in place that will cover any loss or damage caused by a paying guest. Just because 'everyone is doing it' and 'nobody else has run into difficulties', it doesn't mean you can just cross your fingers and hope it won't happen to you.

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