17th April 2015
Thousands of Britons are trying to make some quick cash from their homes by renting through sites such as Airbnb but they could be invalidating their home insurance.
Comparison site GoCompare has warned that the rising popularity of sites such as Airbnb and Couchsurfing, which lets people rent out their spare space to holidaymakers, could backfire.
Ben Wilson of GoCompare Home Insurance said people are failing to check with the home insurer, landlord and mortgage provider before signing up as home-hosts and risk invalidating their insurance and even breaking the terms of the mortgage or lease by doing so.
‘Premiums for household buildings and contents insurance are partly based on who lives in the property and what the property is used for – whether it’s just your family home or you also run a business from home,’ he said.
‘So your insurer will want to know if you plan to let out your home in part or entirely, even on a short-term basis, and may refuse cover, charge an extra premium or put restrictions on the cover provided. For instance, cover for theft may be excluded unless there are signs of a break in.’
He added that potential home hosts should check whether they have public liability cover with their home insurance that will cover them if someone injures themselves in or around your property.
People who rent their homes without telling their insurer could find it refuses to pay out on claims.
Similarly, mortgage terms and lease terms may prevent people from renting out all or even part of their home as a short-term let.
‘If you own your home with the help of a mortgage, then you’ll need to check with your lender to make sure that being a home-host, which is essentially a short-term let, doesn’t breach the terms of your mortgage agreement,’ said Wilson.
‘Likewise, if you rent your property, you may need permission from your landlord and will need to make sure that you’re not breaking the terms of your tenancy agreement.’