As the staycation boom and major sporting events like Wimbledon and the British Open drive peak booking season, Go.Compare’s home insurance experts are warning property owners that a simple assumption could cost them thousands.
The gap in cover
Tamzin Metcalfe, home insurance expert at Go.Compare, explains: “Many homeowners assume their standard home insurance will protect them if they rent out their home to short-term guests. In reality, relying on standard cover leaves you dangerously exposed. If a paying guest accidentally floods your bathroom, ruins your furniture, or slips and hurts themselves, a standard insurer will probably reject your claim. As well as any claims being rejected, you might even invalidate your policy, leaving you without cover.”
This gap can leave you vulnerable to significant financial losses. Guest damage, theft, or related liability claims simply won't be covered by standard policies – and you might not discover this until it's too late.
Why specialist cover matters
Before listing your property, Tamzin advises considering special Airbnb or holiday let insurance: "It can be worth looking at specific holiday let insurance or a policy add-on designed for short-term rentals. The last thing you want to deal with is a costly repair or legal battle related to your holiday let. The right kind of property protection can give you peace of mind and save you thousands down the line."
Tamzin shares five insurance checks every homeowner should make before listing a holiday let:
Review your existing policy wording carefully. Does your current home insurance package explicitly exclude short-term holiday lets? Read the terms and conditions word for word. Many standard policies don't cover lettings at all – and some only cover longer-term residential lets. Don't assume - double check.
Understand what ‘guest damage’ actually means. Guest damage isn't the same as general wear and tear. Your policy needs to spell out exactly what it covers. Will it pay out if a guest damages the shower screen, breaks a window, or damages furniture? What about accidental damage caused by negligence? Get clarity in writing.
Check your public liability limits. Public liability insurance protects you if a guest is injured on your property – from misused hot tub to electrical faults. Make sure your policy includes this cover and that the limit is appropriate for rental property where multiple guests come and go.
Declare your rental activity. You need to tell your insurer about any rental activity, even if it’s just occasional. Failure to disclose this could mean any claim is rejected outright. Be transparent from the start. If your insurer isn't comfortable with holiday lettings, then shop around and find one that is – but never hide the activity.
Compare specialist holiday let insurance. Short-term rental policies are designed specifically for this purpose and might be cheaper than you think. They often cover guest liability, damage caused by guests, loss of income if you have to cancel bookings, and even legal costs. It's worth getting quotes from dedicated holiday let insurers alongside your standard home insurance provider.
Tamzin Metcalfe concludes: "Letting out a room in your home can be a great money maker, but make sure you have all the protections in place before you start. Check your cover level before you list your property. It takes ten minutes and could save you thousands."
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