Pikl report reveals insurance neglect of Airbnb hosts

UK: A recent report by sharing economy insurance specialist Pikl has detailed the neglect of the insurance needs of around one million short-term letting hosts by the UK’s major insurers.

Focusing on the UK property insurance industry, the report revealed hosts are either being excluded from, compromised by or voided from their existing insurance policies.

The report, entitled “Insurance in the sharing economy – 2019 property focus”, was published by Pikl and is the first in-depth study of its kind on the attitudes of the UK’s major insurance providers towards the sharing economy.

Pikl is the new brand name for Inlet, which has been operating in this sector for over two years. The report uncovered a number of serious issues where short-term letting hosts are being neglected by the industry:

1.        Appropriate cover for short term letting is virtually non-existent

It is not included as standard with any of the insurers who participated in the report.

2.        Many insurers will void or cancel existing policies if a customer is involved in short-term letting

More than a third of insurers (accounting for 39 per cent of UK property GWP) said they would void and then cancel a customer’s policy if the customer declared that they wanted to use their property for short-term letting.

3.        Where cover is available, it is only for a short period and severe exclusions are imposed

Half the insurers (accounting for 54 per cent of UK property GWP) said they would allow cover to remain active (usually for no more than 30 days) but would impose exclusions on their policies in regard to guests of short term letting; most commonly for theft, malicious damage and legal expenses. Other exclusions include accidental damage and legal liability.

4.        Insurers are keeping customers in the dark about their obligations

Insurers are not, as a rule, informing customers that they need to tell them if they are short-term letting. A huge majority of insurers (accounting for 86 per cent of UK property GWP) admitted that they do not take any steps to inform their customers about the need to declare it. In fact, none of the insurers include a question in their question set! However, 100 per cent of insurers said that they expect customers to inform them if they are short-term letting.

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

Most insurers (accounting for 80 per cent of UK property GWP) said they may not pay out on a claim related to short term letting if it was discovered at the point of claim and the customer had not disclosed this information.

6.        Insurers split over landlord cover

Half of the insurers said they would provide cover for landlords who engaged in short-term letting if they were informed by the policyholder but sub-letting by tenants will more than likely lead to a policy cancellation.

7.        Insurers recognise they ‘must do better’

Less than a third of insurers (accounting for 29 per cent of UK property GWP) were completely satisfied with their current approach to, and processes for, the short term-letting market. It was the same for the customer questions in their question sets and their policy wording.


The 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 per cent 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 CEO Louise Birritteri said: “Our study is the first to establish how the UK’s major insurers treat customers who participate in the sharing economy and short-term letting market.

“It was refreshing that so many insurance companies were happy to participate as it shows they are taking this issue seriously and recognise some of the shortfalls in both the cover they offer and their communications. However, it does highlight the gaping hole of awareness that exists around this topic.

“There is a false expectation from hosts that their standard home insurance policy will cover them when in fact it’s unlikely that it will and they will need specialist cover, but there’s a scarcity of appropriate cover currently available.

“Combine that with the lack of clarity over customers’ responsibilities to inform their insurer, the absence of proactive communications from insurance companies and comparison sites and the misperceptions about platforms like Airbnb’s own guarantee, and you find that many hosts fall into a ‘void of no cover’ and are at risk of financial loss through no real fault of their own.

“To address this situation, we are working in collaboration with many of the large insurance companies to ensure that people who want to earn money through short-term lettings are protected.

“We have launched a range of specialist insurance products to cater specifically for them that are designed to run alongside standard home and landlord policies on offer from any insurance provider. These products are available to the insurance broker market.

“We will also soon be providing all-inclusive plans in collaboration with a panel of insurers from our website. It’ll mean that the generation of Airbnb-ers can now get the best of both worlds from one place.

“In Pikl they’ll have a brand that understands the sharing economy and can provide the specialist cover they have been struggling to find, as well as providing the best deals for their standard household insurance,” she added.

Birritteri presented the findings of the report at the Short Stay Show at the ExCel in London.

For more information, download the full report at pikl.com/sharing-economy-insurance-report