UK: 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 bother to check this when booking.
This has led to sharing economy insurance specialist Pikl calling for guests to make sure they check their accommodation hosts’ insurance before booking.
In its white paper, published recently, 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 per cent of customers thought that insurance was essential, only one in three (31.3 per cent) said they actually bothered to check to see if the accommodation they were booking had adequate cover.
This comes as no surprise to Pikl CEO and founder, Louise Birritteri, who said: “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 is not. Currently, too many short-term let hosts are not properly insured, more through a lack of understanding than avoidance.
“That is 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,” she added.
Quality in Tourism director Deborah Heather 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 is not 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 insurances. 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,” she added.
One of the key aspects of insurance that Pikl is 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.
Pikl published an industry-wide report* “Insuring the sharing economy 2019” earlier this year which unearthed a number of serious issues where short-term letting hosts are being neglected by the 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 is 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