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Why can’t I insure my short stay rental?

To insure a property that is let to short term tenants (such as via Bookabach or Airbnb), initio require the dwelling to be ‘capable’ of being the home or holiday home and ‘intended’ by the owner to be a home or a holiday home.

Included below is an extract from the EQC Guidelines defining a holiday home and the intention of a holiday home.

“Holiday home”

A holiday home is a secondary residence for somebody whose home is elsewhere. It may be used on a transient basis by that person, usually for holidays.

As guidance, a building is unlikely to be a holiday home if:

  • it is set up purely as a commercial enterprise and the owners do not use it or intend to use it for their own purposes (or for somebody else to use it as their holiday home).
  • an organisation which owns holiday homes purely for the benefit of its members, and these members pay to stay there.
  • it is on the same property as the owners’ residence. Even though others, like family and friends, may use the building for holidays or visits, it is unlikely to be the holiday destination for the owners or the holiday home of any other person.

“Intended to be a holiday home”

From the circumstances there must be an intention on the part of the owner to return again and again no matter how minimal the use. At a minimum it is acceptable if the owner has the entitlement to occupy the property whenever they wish and they store their possessions there.

It is contemplated that a holiday home may be used:

  • solely by the owner;
  • by friends and family as well as the owner; and
  • by tenants on a periodic basis but the owner too, when the owner wants to use it.

Where a home is used solely for short term lets, initio is unable to provide insurance. This is because it is deemed to be a commercial venture (more like a motel) and does not meet the EQC definition of a home.