November 2019 - Pikl

Are you checking your hosts’ insurance before booking?

New research conducted by accommodation accreditation company Quality in Tourism has found that, despite paying guests expecting that their accommodation hosts have adequate insurance, few of them actually check this when booking.

In its white paper, Quality in Tourism’s research established a list of things that people thought were essential as minimum safety standards when booking any sort of paid-for accommodation. One of these was insurance. Its research found that whilst 58.1% of customers thought that insurance was essential, only 1 in 3 (31.3%) said they actually checked to see if the accommodation they were booking had adequate cover.

Louise Birritteri, CEO and founder of Pikl commented, “These findings provide really strong evidence that the insurance needs of the majority of short-term rental hosts are not being adequately accommodated by major insurers in the UK. Guests and hosts participating in the short-term letting sector presume that their hosts’ standard home insurance provides adequate cover. The truth is that, in the vast majority of cases, it’s not. Currently, too many short-term let hosts are not properly insured, more through a lack of understanding than avoidance. That’s because their standard home insurance will not cover any liability from letting a property or room on a short-term basis and could result in their claims not being settled and their policies being cancelled.

“If the majority of guests are not bothering to check, it could lead to a very unfortunate situation where they are not covered should they experience theft, trauma or worse, a severe accident leaving them hospitalised or even permanently injured or incapacitated. We very much encourage anyone booking a short-term rental to check whether their host has the right insurance cover in place. Quality in Tourism’s accreditation scheme should help guests to identify where that insurance is provided.”

Deborah Heather, Director of Quality in Tourism said, “Our findings have highlighted the need for there to be a set of universal standards in place for all types of accommodation where customers pay to stay. It shows that there is still a gap between what people perceive to be in place automatically in regard to safety, cleanliness, and compliance with the law, but in reality, it’s not the case. Importantly, not enough customers are checking these standards before booking. Insurance is seen as one of the essential elements of any rental accommodation’s minimum standards, but we know that in many cases there isn’t the appropriate insurance in place. We would encourage people participating in the short-term let sector to safeguard their rental income and assets by taking out the right insurance from a specialist insurer, such as Pikl, so that, in a worst-case scenario, they are not putting at risk all that they own.

“We believe that all accommodation hosts, including those in the sharing economy, should have the relevant insurance. Our Safe, Clean & LegalTM scheme includes insurance, giving hosts an industry-recognised accreditation and guests the peace of mind that they will be staying in accommodation that meets quality minimum standards.”

One of the key aspects of insurance that Pikl are keen to bring to hosts’ attention is the public liability side of short-term letting. Whilst some hosts may be prepared to risk having to pay a few hundred pounds out of their own pocket to repair a wine-stained carpet or replace a broken door rather than pay for additional insurance, if a guest suffers a serious accident it could result in expensive litigation, costing them tens or even hundreds of thousands of pounds in compensation. That is a risk not worth taking.

Earlier in 2019, we published an industry-wide report* on the sharing economy, which unearthed a number of serious issues where short-term letting hosts are being neglected by the insurance industry:

•             Appropriate cover for short term letting is virtually non-existent

•             Some insurers will void/cancel policies if a customer participates in short-term letting

•             Where cover is available, it’s only for a short period and severe exclusions are imposed

•             Insurers are not informing customers that they need to declare their short-  term letting.

•             Insurers may not pay out on a short-term letting related claim if this activity was only discovered at the point of claim

You can download a full copy of the Quality in Tourism report here. In addition, if you would like to speak with the team about your existing insurance and short term letting needs please do not hesitate to contact our advice centre on 0800 254 5171.

*The ’Insuring the sharing economy in 2019’ report is based on a combination of mystery shopping and a series of qualitative interviews with representatives of the UK’s largest insurers, who manage 90% of gross written premium (GWP) in the UK property insurance market. The survey group represents £4bn of a market worth c£4.5bn, source: Deloitte UK household insurance seminar September 2017 (which pulls together a summary of PRA returns by insurers). It was the most recent report published at the time of the survey.

Pikl at HOST 2019

As the year draws to a close it’s been an exciting 2019 at Pikl with lot’s of highlights. We continue to grow the business, expand our team and most importantly to continue developing new products to help our customers participating in the growing sharing economy.

One of the many highlights was attending our second HOST event at the Business Design center on the 31st October – 1st November. Where has the time gone!

It was great to be an exhibitor at the event, giving us the opportunity to meet so many businesses, suppliers and customers involved in hosting.  We had some of our Pikl experts on our stand advising and guiding hosts on all their various insurance needs.  We know insurance is not something everyone wants to purchase but it’s so important that this is considered before you start hosting. There are some clear gaps in cover with traditional household insurance from many UK insurers which is why it’s always important to speak with a specialist in the sector like Pikl.  Just to highlight this gap please read our report for the sharing economy that we completed earlier in 2019.

The insurance talk was mixed with some fun by our caricaturist, who did a great job portraying many visitors as a caricature on our stand…including the Pikl team!

Our CEO Lousie Birritteri also had the opportunity to take part in one of the panel debates at the show regarding insurance, she provided her top insurance tips for letting out your property.  This was very insightful and hopefully beneficial for people just starting out in their hosting journey or even more experienced hosts that are unaware of some of the insurance gaps.

We look forward to returning to HOST 2020 but in the meantime why not check out Louise’s Top insurance tips before letting out your insurance property.

Top insurance tips from Louise Birritteri at Host 2019

Listing your property on Airbnb or similar websites is a great way to earn some extra money. But many people are surprised to learn that regular household insurance won’t always cover paying guests. See our report about the sharing economy for more information.

If a guest has an accident resulting in an injury or damages your property, you (the host) could be left to cover the costs. In the best-case scenario, this might result in broken belongings. In the worst case – a legal suit involving a personal liability claim against you.

Airbnb offers some protection via their ‘Host Guarantee’ and Host Protection Insurance, which is a positive step in protecting both hosts and guests. However, it’s important to be clear that this protection is no substitute for a specialist insurance policy. You can find out more in our article about Airbnb and the protection it offers hosts.

Take these simple steps before letting out your property to protect your guests and assets.

1. Contact your existing household insurer and ask if they cover short lets.

Some will say no and want to cancel your policy immediately. Others will allow you to keep your existing policy but may not be explicit on what is included in the cover.

2. Ask your current insurer these questions to find out if you’re covered for hosting short lets:

• Will theft without forced entry, accidental and malicious damage by a guest to my property be covered?

• Will any guest injuries that occur be covered? This is known as – public liability insurance.

These are the two main areas for insurance when it comes to cover for hosting. Directly ask your insurer these questions. It’s likely that they won’t offer adequate cover.

3. Don’t use comparison websites, you won’t be covered.

Comparison websites provide a quick easy service for some types of insurance but when it comes to hosting insurance for short letting, you need to speak with a specialist provider. Pikl can help.

4. Save money with an annual (specialist) insurance policy.

If you are letting out your property for more than two weeks of the year or are a Property Manager with a portfolio, get an annual insurance policy with a provider that offers specialist cover. It will cost less. 

5. Always be open and honest with your insurer.

If you are already hosting short lets, tell your existing insurer. If they decide they can no longer cover you, take steps to find the right cover.

Do you want to know more?

Get in touch today for free and friendly advice on preserving the things you love. Call our advice centre on 0800 880 7350 or get a quote with us today.