Holiday home insurance: Everything you need to know…

holiday home by the seaAs a holiday home-owner, you’ll know that the benefits of having your very own weekend escape carry additional responsibilities.

You’ve got an extra property to maintain, pay taxes for and insure.

If you decide to rent your holiday home as an extra income stream, you will need to insure yourself against damages caused  by guests.

The difficulty of finding insurance

Sadly, you can’t just call your home insurance provider and ask them to extend your cover to your holiday home.  Most insurers won’t cover a holiday home.  It’s also vital that you don’t take out standard home insurance for your holiday home without telling your insurer – should they find out, they’ll void your insurance.

Additional risk

To an insurance company, a holiday home carries a greater risk than your main residence.  This is because holiday homes are often left empty for extended periods of time – which makes them an attractive target for burglars or squatters.

Similarly, if you’re not in residence you won’t be around to notice things like leaks, damp or damage caused to the property by adverse weather.  It’s possible that the condition of the property could deteriorate without you realising.

If you do decide to let your property out to guests, at some point, you’ll find it damaged.  Sometimes it’s due to irresponsible behaviour on the part of your guests and sometimes it will be a genuine accident. However, standard home insurance policies won’t cover this as they typically exclude properties that stand empty for 30 days at a time.

You’ll need to find specialist holiday home insurance that takes into account occasional use and allows for holiday letting.

What cover do you really need?

Buildings insurance will cover your property for any damage caused by fire, adverse weather, burst pipes, subsidence or any rebuilding work that may be necessary as a result of an insured event.

It should extend to any outbuildings or other structures on your property.  You will also need to work out the rebuilding value of the property (not it’s market value).  There is an online calculator on the Association of British Insurers website.

Contents covers anything inside your home that is not part of the building structure, such as furniture, appliances TVs and electrical equipment etc…  If you plan to let out your holiday home, you will need accidental damage cover.

Extras

If you intend to let out your holiday home, you’ll need public liability insurance.  This will cover legal costs if your guests decide to sue you for any reason.

If you’re paying anyone to maintain the property (such as cleaners or gardeners), you should get employers liability insurance too..  It’s also recommended that you buy legal expenses cover which will cover legal costs  in case you find yourself in dispute with guests.

Finally, make sure you read all the fine print on your policy.  Ensuring your holiday home is fully insured for any reasonable eventuality will allow you to enjoy your second property to the full.

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