'My insurer's curious policy means we must make 14 separate claims for a cancelled Airbnb'
Fergus Smith writes
Last May, due to the lockdown, I was forced to cancel the weekend rental of a house in the Cotswolds made through Airbnb. I was hosting a family celebration, so I had paid the rental of £1,491 myself and did not expect any contribution from my 13 guests.
Unfortunately, Airbnb’s “extenuating circumstances” refund policy only covered rentals starting within 45 days of March 14. Beyond this cut-off date, the host’s usual terms and conditions applied. My booking was non-refundable, but Airbnb did negotiate a partial refund with the owner. She repaid £834 “as a gesture of goodwill”, which left me £657 out of pocket.
My annual InsureandGo travel insurance policy offered pandemic cover, so I made a claim. However, the insurer says it will only pay 1/14 of the cost of the rental. It says that each of the other travellers must make a claim against their own policies for their portion of the value of the rental. Is this correct?
Gill Charlton, consumer correspondent, replies
In the exclusions listed under the cancellation section of InsureandGo’s travel policy, it says: “We will only consider the unused expenses of a person who has taken out insurance cover. For example, if you are travelling with someone who is not insured, we only pay your proportion of costs not theirs, regardless of who has paid for the booking.”
This exclusion is found in all general travel insurance policies. And, even if your guests were to make individual claims and repay you, it is unlikely you would receive more than a few pounds after the deduction of the excess – usually around £50 – on each individual policy. Several similar cases have been sent to the Financial Ombudsman Service for review and it has not upheld any of them.
The view of the Competition and Markets Authority is that, where rental contracts have been “frustrated” by a lockdown, customers should receive a full refund. Its advice says that if the business cannot provide the service, it is “likely” to be unfair to keep the customer’s money.
Consumers can be offered credits, vouchers or rebooking as an alternative to a refund but it should still be available as an option. However, its advice is not legally binding.
Rothwell & Towler (0345 908 0101; guestfirst.co.uk) is unusual in offering UK cancellation insurance for self-catering rentals. The host can pay and provide a guest list. However, cancellation due to Covid-19 issues is excluded.
