The insurtech startup is keen to bring the issue of public liability for short term rentals to the fore 

Insurance needs for short-term rentals are not being adequately accommodated by major UK insurers, according to the head of insurtech Pikl.

Louise Birriteri, chief executive and founder of Pikl has called on guests to make sure that they check their accommodation hosts’ insurance prior to booking.

It follows a white paper published by industry body Quality in Tourism which found that paying guests expected hosts to have adequate insurance, but few of them bothered to actually check this was the case.

Over half (58.1%) of customers thought that insurance was essential, but only 1 in 3 (31.3%) said they actually bothered to check to see if accommodation had adequate cover.

Strong evidence 

Birritteri said that the findings provided “strong evidence” that 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.”

She said that it is because their standard home insurance will not cover any liability from letting a property or room on a short-term basis and could therefore result in their claims not being settled and policies 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.

Universal standards

Deborah Heather, director of Quality in Tourism explained that its white paper highlighted that there needs to be a set of universal standards in place for all types of accommodation where customers pay to stay.

Heather said: “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.”

The firm’s 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.

Quality in Tourism is encouraging people participating in the short-term letting sector to safeguard their rental income and assets by taking out the right insurance from a specialist insurer like Pikl.

Public liability

Pikl is keen to bring the public liability side of short-term letting to hosts’ attention. This is because if a guest suffers a serious accident it could result in expensive litigation, costing them a great deal in compensation.

The specialist short-term rental firm published an industry-wide report – “Insuring the sharing economy 2019” earlier this year which uncovered a number of serious issues where short-term letting hosts are being neglected by the industry, these include:

  • 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

Heather added: “We believe that all accommodation hosts, including those in the sharing economy, should have the relevant insurances.”