CLI Ad
UPFRONT
HEAD TO HEAD
How should home-sharing insurance gaps be closed? Once a homeowner hands over the keys to a third party, their coverage can be voided
Thomas McCourtie Analyst, general insurance Verdict Financial
Director of product & marketing HomeProtect
Shane Leivers
Graeme Trudgill
“Services such as Airbnb present more of an opportunity than a problem for insurers. Sharing is commonplace across all areas of personal finance, and I don’t see why insurance should be an exception. For home-sharing, a host insurance policy is required, and this type of cover isn’t offered by several mainstream providers. Therefore the onus is on the insurer to keep pace with not only market developments but societal changes too, and adapt their products accordingly. Consumers now expect a more personalised product tailored to suit their needs. This is the only way the ‘gaps’ in service can be closed; otherwise, as consumers continue to change their attitudes and behaviours, more will appear. Product development and reinvention is key.”
“The sharing economy is changing the way people use their homes; however, many homeowners don’t realise the risks that opening their homes up to paying guests can bring. Airbnb’s Host Guarantee provides a useful back-up to home insurance, but some homeowners mistakenly believe this is a replacement. Personal liability and protection for valuables is limited, and it’s becoming increasingly common for guests to sublet without permission. Homeowners need more help to understand how they can protect themselves. If this is how modern homeowners live, then insurance providers need to adapt to new insurance situations to help meet customer needs.”
“The growth of Airbnb results in the need for a different home insurance model. Every sharing transaction has many stakeholders: the facilitating platform, the property owner, and the user. Each must cover or transfer their liabilities and risks. Brokers are now providing innovative solutions for sharing economy participants. Key to minimising risk is validation – the more information home sharers can obtain about their users the easier it will be to find appropriate insurance. Many can now arrange covers targeting the different parties in the sharing transaction for loss or damage through specialist covers or top-up policies that accompany existing policies.”
Executive director BIBA
ADDRESSING COVERAGE FOR HOME HOTELS There’s no escaping the importance of Airbnb: a recent study from 7Park Data put the app’s inventory of rooms at approximately 2.3 million globally, and with a valuation of over $25bn it is worth 25% more than legacy accommodation go-to Hilton. US bookings surged 45% year-on-year in the first quarter of 2016, and the mobile app’s monthly active users doubled from Q1 2014 to Q1 2016. For Airbnb’s growing pool of hosts grappling with the realisation that the service’s much-vaunted ‘Host Guarantee’ is not the same as insurance, and with horror stories such as the London couple who found their flat was used for a 21st birthday party resulting in £3,000 in damages, solutions to the current gaps in coverage cannot come soon enough.
8
www.insurancebusiness.co.uk
08-09_Head to head_SUBBED.indd 8
15/07/2016 12:06:01 AM