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Top tips: getting insurance for your holiday home

Tahmina Mannan
Written By:
Tahmina Mannan
Posted:
Updated:
09/08/2013

Read our guide to make sure your second home is properly insured.

Holiday homes are often a place to escape to for some rest and relaxation. But for the weeks and months you are not at your property, protecting it with the right insurance cover is vital.

Many insurers do not cover holiday homes as standard because they are often left empty for long periods, increasing the risk of theft, burst pipes and leaks going unnoticed for longer possibly making the damage worse.

Kevin Pratt, insurance expert at moneysupermarket.com, says: “Theft is more likely if a house is unoccupied, and if a home is let, tenants do not always take as much care of the property as the owners.”

When it comes to buildings insurance, Pratt says the policy should cover the cost of rebuilding, including any outbuildings and swimming pools – but remember, the rebuild value is not the same as the market value.

“Many insurers offer online calculators to determine the rebuild cost but the figure might be tricky to calculate so it might be a good idea to choose a policy that offers unlimited cover, so you don’t have to worry about working out the rebuild cost,” he says.

And if you intend to let your property to tenants during the times you are not there, you will need to make sure you are covered for commercial usage, not just family-use.

Holiday homeowners often overlook the need for adequate contents cover because they don’t think they have anything particularly valuable.

However, you will be surprised at just how much money all the little things can rack up to. Homeowners should try to walk through each room and make an inventory of every item, and don’t forget the garden essentials like BBQs and garden furniture.

Here is a useful checklist for holiday home owners:

Adequate Building & Contents Insurance – check for specific security measures required to ensure your policy is valid. Try and find a policy that covers theft by non-forcible entry, so you’re insured if any windows are left open, essential in hot countries. You might want to make sure outdoor furniture is covered as well as indoor. Check how long you can leave your property unoccupied without invalidating your cover.

Public Liability Cover – vital if you intend to let your property when you’re not using it. This will cover you against any claims a guest makes against you if they injure themselves while staying in your property.

Insurers recommend an indemnity of over £3m. Make sure that your public liability insurance extends to cover any accidents involving your swimming pool.

Policies bought locally might appear cheaper, but foreign insurers do not necessarily provide the same level of cover as those in the UK – in Spain cover is typically up to £200,000 whereas UK insurers offer more.

Also make sure the policy covers accidental damage by tenants, loss of rental fees and emergency travel costs in case your property is damaged and you need to get it quickly.

Warning: having these features will push the cost of your insurance premium up:

Private pool/hot tub,
Non-habitable outbuildings
Conservatories

Letting on a long-term basis

Generally most insurers will charge more if you plan to let your property long term. However, if your property is in the UK you can let it out on a short hold tenancy agreement if you have landlord insurance.

It is also worth noting that leaving your property unoccupied for a long period of time can also be an issue.

Look out for unoccupancy exclusions.

Some policies will stipulate the property must not remain empty for more than 30 or 60 days in a single period, and claims will not be considered if losses are incurred outside of that period.

This is an important consideration if you are not letting out the property and may not visit it yourself at least every month or so.

Some policies will also insist that your water supply be turned off and that fixed water tanks and pipes be drained between the months of December and February if the property is to be empty for more than 48 hours. Otherwise, the property must be maintained at a minimum temp of 15 degrees centigrade. There are some exceptions to this condition in countries with warmer climates. Some insurers will increase their excess on claims if this condition is not met.

It’s also worth pointing out some of the more unexpected benefits that some holiday home insurance policies can offer, such as legal liability for domestic employees, which gives you protection if your cleaner has an accident at the property, for example.

UK-based insurer or one overseas?

One obvious issue with using a foreign insurer may be the language barrier.

Even if you speak the local language, insurance jargon can be tricky and failing to understand one bit could void your policy later.

Public liability limits are generally lower with foreign insurers.

With UK companies, payment can be made in sterling by direct debit, all your documents are in English, and for certain countries an additional schedule is produced in the local language.

However, local insurers may offer cheaper deals or policies that are more astute to your needs.

Large excesses (e.g. £5000) for damage caused by earthquakes or subterranean fire aren’t uncommon. Turkey is usually excluded from this because of compulsory earthquake cover called DASK.

Pratt adds: “Most companies cover properties outside the UK, but you should always check that the country is listed if your home is overseas. Cover might be restricted in some areas. For example, a number of insurers will not cover earthquakes in Greece or Italy.”

Note that subsidence may be excluded in some countries and that although most insurers will cover static caravans, some countries may be excluded. 

Do I need additional holiday home cover?

The following extras might be included in a policy. If not, it might be worth paying a higher premium for more extensive cover:

Accidental damage: If you plan to let out your property, accidental damage can be useful. After all, guests are not always as careful as the owners.

Home emergency cover: Some insurers give you – and your guests – access to a 24-hour emergency helpline if you need assistance in a domestic emergency, such as a burst pipe.

Loss of income: If you cannot let out your property because it is damaged, perhaps by a fire or a flood, it can be comforting to know that your insurance will cover your loss of income. Most firms, however, will only cover the loss of any pre-booked income.

Alternative accommodation: Your insurer will cover the cost of placing your guests in alternative accommodation if your property is uninhabitable due to unforeseen circumstances.

• Public liability insurance: It’s a good idea to take out insurance to cover you for the death or injury to a third party on your property.

Personal possessions cover: Insurance can often be extended to include items that you take out of the home, such as laptops and mobile phones. But you should also check the details of the contents insurance for your main home, as you might already be covered.

Tips for cheaper holiday home insurance:

• Shop around for competitive quotes. But remember that the cheapest policy is not always the best.

• Make sure the home is fitted with approved security devices, such as alarms and window locks.

• All policies include an excess, which is the amount you must pay towards any claim. If you are happy to pay a higher excess, you should be rewarded with a lower premium.

• Maintain your home so that it does not fall into disrepair. Also insulate any pipes and tanks to prevent freezing in cold weather.

• If you buy buildings and contents cover from the same insurer, it might be cheaper than separate policies from different firms.

• Some insurers allow you to pay your premium monthly to spread the cost. Monthly payments are convenient, but they usually work out more expensive. So try to pay up front if you can.