By Steve Smethurst
Ask most people to explain the ‘sharing economy’, and you might be met with a blank face and an uncomfortable silence. It’s far easier to give examples.
Ebay is perhaps the best-known. The auction site allows us to sell the unwanted contents of our cupboards and lofts to the highest bidder, wherever they might be. It also allows us to buy direct from a supplier, at a price we determine, without needing to leave the house.
In terms of other apps and websites, it’s remarkably easy to turn a car into a taxi with Uber 1 and, if you excel at building flat-pack furniture, you can market those skills on TaskRabbit.
The sharing economy is all about connecting ‘people with people’ for a mutually advantageous deal.
Perhaps the fastest-growing sector within the sharing economy is accommodation. If you're lucky enough to have extra space in your home, companies like Airbnb, HomeAway, One Fine Stay and FlipKey (a TripAdvisor company) make it easier to attract paying guests.
There’s little doubt that home-sharing is thriving, especially for younger generations who are happy to stay in someone's family home, guided by up-to-the minute user reviews, rather than an ambiguous star rating.
It's certainly a fast-growing trend – the Office for National Statistics estimates that 28% of adults in Great Britain (and 40% of 35 to 44-year olds) used a peer-to-peer accommodation service in 2017 2.
We've been looking at this market, and our latest survey suggests that some home-sharers are failing to take sensible precautions and risk making unwise decisions 3.
The good news is that we can see no signs of home-sharing slowing down. Our research suggests that 38% of those who’ve stayed in a home-share are actively considering listing their property. A further 40% might consider it in the future, so the market is likely to expand.
Room for improvement
That said, 39% of respondents who have already listed their property on home-sharing sites are currently living in rented accommodation. Unless it’s been authorised by their landlord, any insurance claims resulting from home-sharing would be rejected on the grounds of misuse of the property.
Furthermore, 19% of respondents with properties on home-sharing sites don't have home contents insurance that covers incidents for guests staying at their home.
This is cause for concern, as home-sharing mishaps are all too frequent. More than half of hosts (53%) said guests had caused damage, including breakages and spillage, while just under half (48%) reported the theft of personal items or furniture. Almost one in five (18%) said guests had left their homes in an unacceptable state.
Guests did admit they were sometimes at fault – two thirds (66%) said they had broken or damaged something. Most owned up and offered to pay (35%) or replaced the item (28%). However, one in eight (13%) said they had blamed the damage on someone else, and around one in 10 (9%) said they hid the damage.
From headphones to hoovers, our Contents Insurance helps protect your possessions.
Protecting your property
The fear of theft or damage is so prominent that around half of hosts remove belongings when guests come to stay, and four out of five (81%) would consider using a home-security system, for example a security camera, to monitor guests.
A surprisingly high proportion of those – approximately a quarter – said they wouldn’t inform guests that cameras were in place.
The latter is particularly worrying as non-disclosure would be in clear violation rules of home-sharing rules.
Airbnb, for example, states: “We require hosts to disclose all security cameras and other recording devices in their listings, and we prohibit any security cameras and other recording devices that observe the interior of private spaces (such as bedrooms and bathrooms), regardless of whether they’ve been disclosed.”
Simon Warsop, Chief Underwriting Officer for General Insurance at Aviva UK, warns that while home-sharing is a great opportunity to earn extra income, guests can be unpredictable.
He says: “Anyone who has a standard home contents and buildings insurance policy and is thinking about letting out their home – even if it’s just for occasional or temporary use – should tell their insurer in advance. This helps to ensure people have the level of cover that’s right for them, as our research indicates that around half of hosts have seen something damaged or stolen when they’ve let out their homes.
“For peace of mind, we’d also encourage homeowners to remove or lock away any valuables or easily-damaged items while guests are in their homes. Accidents happen, but this can help to minimise holiday headaches.”
Considering renting out your house? Read our article exploring the pros and cons of home-sharing.