Does using Airbnb invalidate your buildings insurance?

Airbnb to let

Yes – according to a friend of mine’s broker who he spoke to last week.

Ed has a flat in Notting Hill, London. There are five flats within the building and Ed plus the other owners had become concerned that one of the freeholders was renting out their flat on Airbnb and not actually living there at all – they felt that this was a change of use from residential to a commercial property, a breach of the existing long lease and also contrary to existing planning law (as in many other places). One of the female residents said that she didn’t like finding random people in the building when she came home alone, the others didn’t like the noise and possible extra maintenance from the higher traffic because of regular moving in, out and cleaning. Ed wondered if the flat being let out, instead of lived in, effected the buildings insurance of the entire building so he asked his insurance broker, Flats Direct, and they replied:

“Covea, who have advised that as long as the total amount of flats that are used as holiday lets or weekend homes does not exceed 25% of the total number of flats this will be acceptable.”

So this leaves the rest of the freeholders in a position: if one more of them started to use Airbnb then they would be over the 25% and the buildings insurance would be invalid or would need to be re-negotiated, no doubt at a higher cost.

Makes me wonder – how many blocks out there are paying for insurance that’s not actually valid because several flats are let out on Airbnb or a similar service? It would be interesting to hear from anyone in the insurance industry about this – have some major claims been turned down on these grounds? After all, who is in the financial position to argue with insurers when their building has just burned down?