Can a hotel or holiday rental sell cancellation or travel insurance to its guests? (2026)

Updated: 10 November 2026

Many guests ask about cancellation insurance and some insurers offer properties the chance to sell it at booking. Is it allowed? We read Directive (EU) 2016/97 on insurance distribution (IDD) and the laws transposing it in Spain, Portugal, Italy and Greece (links at the end). We only give what those texts say and flag what we could not confirm. This is not legal advice: before signing with an insurer, check with them or a lawyer.

Summary

Yes, with conditions. Directive (EU) 2016/97, Art. 1(3), takes out of most of its rules anyone selling insurance as a complement to their own service, if three conditions are all met.
The insurance must complement your service: for example, covering the guest being unable to use the stay (cancellation) or loss of baggage and other risks of the trip booked with you.
The premium must not exceed €600 a year, calculated pro rata, or, if the service lasts three months or less (a normal stay), €200 per person.
Even when exempt, information and complaints duties still apply, and the insurer must ensure them with you (Art. 1(4)).
Outside those limits, selling insurance is insurance distribution with all its rules, including registration.

What Directive (EU) 2016/97 says

Art. 1(3) exempts «ancillary insurance intermediaries» when all these conditions are met:

a) The insurance is complementary to the provider's good or service and covers breakdown, loss of or damage to the good or non-use of the service, or damage to or loss of baggage and other risks linked to travel booked with that provider.
b) The premium does not exceed €600, calculated on a pro rata annual basis.
c) Where the insurance complements a service of three months or less, the premium per person does not exceed €200.
Art. 2 defines that intermediary: its principal professional activity is not insurance distribution, it only distributes insurance complementary to its good or service, and it does so for remuneration.

What still applies when exempt

Under Art. 1(4), the insurer or intermediary selling through you must ensure that:

Before the contract, the guest receives the distributor's identity and address and the complaints procedures.
Appropriate arrangements are in place to meet the conduct rules and to consider the customer's demands and needs before the insurance is proposed.
Before the contract, the guest receives the insurance product information document.
In practice the insurer prepares these documents and you hand them over at booking.

Where it sits in each country

All four laws repeat the same €600 and €200 limits:

Spain: Royal Decree-Law 3/2020, Book Two. The exemption is in Art. 130(2) (not Art. 129, which defines the scope) and what still applies in Art. 130(3). We read the text as published in the BOE, not the consolidated version.
Portugal: Law 7/2019, annex (legal regime for insurance distribution), Art. 2(2), for the «mediador de seguros a título acessório». We could not confirm which duties it keeps for the exempt case.
Italy: Private Insurance Code (Legislative Decree 209/2005), Art. 107(4) (exemption) and 107(5) (what still applies), in the updated text published by IVASS.
Greece: Law 4583/2018, Art. 3(2) (exemption) and Art. 3(3) (what still applies).

If the conditions are not met

If the premium exceeds the limits or the insurance does not complement your service (for example, annual medical cover), the exemption does not apply.
You then sell insurance as a distributor subject to the law: in Spain, the preamble of Royal Decree-Law 3/2020 says ancillary insurance intermediaries register in the administrative register of insurance and reinsurance distributors.
Ask the insurer which status it uses for you and who answers to the supervisor (DGSFP, ASF, IVASS or Bank of Greece). We did not consult those supervisors' pages.

The simple alternative: don't sell insurance

You are not required to sell insurance. Two options with no insurance paperwork:

Tell guests they can buy travel insurance themselves from the insurer of their choice. If you only inform and do not sell, you hand over no insurance documents.
Offer a flexible rate with free cancellation up to a date, next to a cheaper non-refundable rate. Guests choose their own risk without insurance. We explain how to write it in our cancellation policy guide: /hotel-cancellation-policy-how-to-write-booking-airbnb-google-2026.
Whichever you choose, write your cancellation terms clearly and in the same place the guest books.

Before signing with an insurer

Which insurer covers the risk and who is the registered intermediary?
Is the premium per person and stay below €200?
Do they give you the product information document and complaints procedure to hand over before purchase?
What exactly is covered (cancellation, curtailment, baggage) and what is excluded? Guests will ask.

How iQuota helps

We make your property available to AI assistants through a connector, with direct booking, payment at the property and 0% commission. Assistants show your cancellation policy as you define it. iQuota does not sell insurance. Nobody can guarantee that an AI will recommend you.

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Frequently asked questions

Can a hotel sell cancellation insurance?

Yes, as a complement to its service and without the full distribution rules if the premium does not exceed €600 a year or €200 per person for stays of up to three months (Directive (EU) 2016/97, Art. 1(3)). Information and complaints duties still apply.

Where is the exemption in Spanish law?

In Art. 130(2) of Royal Decree-Law 3/2020; what still applies is in Art. 130(3).

What if I don't want to sell insurance?

Tell guests they can buy it themselves and offer a flexible rate with free cancellation next to a non-refundable one.

Sources

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