Holiday home insurance: all you need to know

 ( Unsplash)

( Unsplash)

A holiday home is a place to which you can escape to forget all your worries. Or, at least, it should be.

Problems can arise, however, and that’s where holiday home insurance steps in. It can provide peace of mind, whether there’s a problem with the property itself, or if its visitors are blighted by bad luck.

Here’s what you need to know and what to look out for when taking out this type of cover.

What is holiday home insurance?

Holiday home insurance is designed to cover the risks that can arise from owning a second property in the UK, or overseas.

For example, it provides financial protection from potentially wallet-busting events such as flooding, burglary or guests getting injured on a property’s premises and you – the owner – being found liable.

It’s possible to take out holiday home insurance for a range of properties and buildings including, houses, apartments, chalets and static caravans.

What does holiday home insurance cover?

Holiday home insurance has many parallels with traditional home insurance – but there are important differences as well.

For example, holiday home insurance typically covers properties from the usual risk of damage caused by fire, flooding and storms, as well as loss due to theft. But it also provides cover when buildings are left unoccupied for lengthy periods of time, say, 30 days or more.

Standard home insurance policies tend not to cover for this, or they impose severe restrictions on the cover provided in such situations.

When it comes to buying holiday home insurance, it’s important to shop around for the best combination of price and protection. You can do this online and, as we’ll explain, cover comes in a variety of levels.

Can’t I just rely on standard home insurance?

No. To properly insure your holiday property, you will need to take out this more specialist cover. That’s because standard home insurance policies do not typically provide the necessary level of cover for holiday homes.

For example, they do not cover properties which are left unoccupied for extended periods of time, and they won’t extend to holiday properties being let out for rental income purposes.

As with standard home cover, holiday home insurance comes in two parts:

  • Building insurance This element covers the property’s structure, including its roof, floors, walls, doors, windows and permanent fixtures.

  • Contents insurance This element is concerned with items inside a property and protects against the cost of repairing or replacing possessions, furniture and fittings in the event they are damaged or stolen.

You can buy buildings and contents insurance for holiday homes separately, or you can combine the pair in an all-in-one policy from a single provider.

Depending on your choice of provider, policies also include optional cover for accidental damage, home emergencies, or problems caused through letting out your property. These elements may come at extra cost, so it’s important before signing up to run through the details and understand what is (and isn’t) covered by your policy as standard.

Extra cover

The following are examples of types of cover that may be included within a holiday home insurance policy. If they’re not included as standard, it might be possible to add them on at extra cost:

  • Accidental damage Covers the cost of repairs or replacement items. For example, where a guest has broken the TV

  • Home emergency Provides you with contact information for local tradespeople in the event that work needs to be carried out on your property following an emergency such as the boiler breaking down or pest infestation

  • Locks There may be separate cover to pay for changing the locks if the keys are lost or stolen

  • Emergency travel Meets transport costs in the event you have to visit a property quickly to help sort out a crisis and fix any problems

  • Loss of income or rent Offers financial cover from the risk of lost income. For example, where a property cannot be rented out following a flood or other disaster

  • Alternative accommodation Should a property become uninhabitable, this covers the costs of housing guests elsewhere

  • Public liability insurance Provides financial protection from legal action should guests suffer injuries in your property for which you are held financially responsible

  • Employer’s liability insurance A legal requirement that covers the cost of employees (eg gardeners, maintenance staff) taking legal action against you after being injured while at work on your premises

  • Legal expenses Protects financially against the cost of potential legal disputes you enter into with neighbours or guests.

What’s excluded from holiday home insurance?

Insurance policies may feature exclusions, in other words, particular scenarios where the provider has said it will decline making a payout to a claimant.

Exclusions on holiday home cover will vary depending on the insurer. Typically, however, exclusions can apply to:

  • Extended lets This where guests have decided to stay long-term in your property (say, three months or more). In this instance you may be required to take out landlord insurance

  • Stag and hen parties Groups like these may be deemed higher risk by your insurer and it refuses to cover them. You may also be declined cover if your guests invite other people into the property. This can especially apply in the case of theft, for which claims would only be covered if forced entry into a property could be demonstrated

  • Damage caused by pets Especially pertinent to pet-friendly properties that are being let. Your insurer may decline cover from damage to property caused by owners’ four-legged friends

  • Bedroom numbers Some policies will decline cover for properties featuring a large number of bedrooms. Check your details to ensure your provider does not impose a maximum limit.

Is holiday home cover a ‘must buy’?

Buying holiday home insurance isn’t a legal requirement (if you need employer’s liability cover, you must have it in place in some form – you can buy it separately). But where a property is mortgaged the lender might require that buildings insurance is taken out as part of the arrangement.

You are not obliged to buy the policy the lender may offer you.

Having holiday home insurance will cover your property if it is going to be unoccupied for a significant length of time, say, 30 days or more. It’s also a useful back-stop where you’re letting out a property to strangers.

Who offers holiday home insurance?

Holiday home cover is a specialist type of insurance but you won’t be stuck for a choice of provider. Well-known names such as Aviva and AXA both offer cover, and so do more niche providers such as Schofields, which specialises solely in this type of insurance. Other names include Home Protect, Towergate and Swinton.

Will a lettings agency sort out my cover?

Probably not. For holiday homes, a lettings agency’s responsibilities extend to tasks such as administering guests and their bookings as well as keeping the premises clean and tidy for new arrivals. It’s typically up to the property’s owner to make sure he or she has properly insured the building in question.

Covering overseas holiday homes

Many UK-based insurers offer holiday home policies that cover second properties located both domestically as well as abroad. In the case of the latter, restrictions may apply as to which countries a provider covers. Check before signing up to a policy.

Note that in the case of overseas holiday homes, additional cover restrictions may apply. Insurers view these properties as higher risk because they are typically left unoccupied for longer periods and can be more vulnerable to damage.

Using a local, overseas, insurer rather than a UK-based one is an alternative. Choose a reputable provider, preferably through word-of-mouth recommendations from overseas property owners based in the same area as you.

If you don’t speak the local language, ensure policy documents are drawn up in English. Check also for an English-speaking call-centre should you want to make a claim.

Tips for taking out holiday home insurance

  • Combined policy Insurance providers may offer a money-saving deal if you buy both elements of your holiday home insurance on one policy

  • Make annual payments Making an annual payment on your insurance is likely to work out cheaper than paying monthly for the same level of cover

  • Maintain your home Reduce the risk of making a claim on your property by carrying out necessary repairs as soon as possible and keeping up with its general maintenance.

  • Improve security Installing an alarm system on your property can also reduce the risk of making a claim and should help keep premiums down

  • Pay a higher excess The excess is the part of an insurance claim you agree to pay before the insurer steps in to meet the balance. Paying a higher excess can help lower premiums, but make sure the amount agreed is realistic and affordable.