Swapping homes seems like a cool idea for a cheap holiday. You agree a week or two, hide your valuables and put covers on the furniture. But your house is probably not insured, as Saga notes here;
Worldwide searches for “home swap website” have risen by 604% in the last year, and 135% in the last month, according to new Google search analysis conducted on behalf of Saga Home Insurance, highlighting growing interest in home swap holidays.
Home swaps, where homeowners temporarily exchange properties for a holiday, are becoming a popular, budget-friendly alternative to hotels and rentals.
But while it may seem low-risk, homeowners may not realise the impact it could have on their home insurance, or the steps they may need to take before handing over their keys.
A recent Saga Home Insurance poll of 1,000 UK homeowners reveals that while interest in home swapping is high, understanding of the potential insurance implications could be limited:
- 59% would not inform their insurer before participating in a home exchange, or are unsure if they even need to
- 40% are unsure whether home swapping would be covered by a standard home insurance policy if no money is exchanged
Home swaps fall outside standard home insurance cover
Saga’s home insurance expert warns that home swapping is not as straightforward as many assume when it comes to insurance.
Anna Thunstrom, Head of Home Insurance at Saga, says:
“A home swap of any duration would need to be declared to your insurer. If you’re allowing other people to stay in your home while you are not there, without informing your insurer, your insurance could be null and void.
“This is different from just leaving your home unoccupied to go on holiday, as it doesn’t carry the same risk of theft or malicious or accidental damage in the home by other people. Most insurers allow 30-60 days before needing to notify your insurer that it’s unoccupied. At Saga, this is 60 days.”
Paid or unpaid, both must be declared
Anna Thunstrom continues:
“From an insurance perspective, both paid and unpaid home swaps would fall outside of standard cover and would require notification to your insurer.”
She explains that cover can be significantly affected depending on the arrangement:
“Depending on the circumstances, such as duration and whether payment is involved as part of a formal short-term holiday let, the insurer may apply additional terms to the policy.
“This can include removing cover for theft or malicious damage by any persons lawfully in your home, and may also remove cover for accidental damage during the stay. In some cases, insurers may decline cover altogether and specialist insurance may be required.”
The common assumption that ‘no payment = no risk’ is incorrect
Anna highlights a key misconception:
“It’s a common assumption that if no payment is involved, there’s no need to inform your insurer, but that isn’t always the case. Even if no money is exchanged, it still needs to be declared.
“If a home swap has not been disclosed, and this is not reflected in the policy at the time of a claim, insurers are within their rights to decline claims outright.”
What could go wrong with a house swap?
While many house swaps are successful, homeowners should be aware of potential risks, including:
- Accidental damage to the property or contents
- Theft or loss of belongings
- Liability if a guest is injured while staying in the home
- Reduced control over how the property is secured during your absence
- Disputes if damage occurs in the property
- Complaints or disputes with neighbours, about issues such as noise or parking disruption
A growing trend, but one to approach carefully
Rather than focusing solely on cost savings, homeowners are being urged to fully understand the implications before entering into a swap.
Anna Thunstrom concludes:
“Before agreeing to a home swap, it’s important to understand the risks involved and ensure you are comfortable with them.
“Always inform your insurer in advance and make sure you fully understand the implications before agreeing to the swap. This includes whether there may be reduced terms, exclusions or higher excesses, and whether you would still be comfortable proceeding if certain types of claims would not be covered.
“It’s important that homeowners understand how their home will be used during the period of the swap, as this will affect how the insurer assesses the risk.”
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