As the UK emerged from a long-awaited escape from successive coronavirus lockdowns but faced continued foreign travel restrictions, the chosen holiday became the staycation. So popular has this become that demand for self-catering holiday homes has soared and by the 26th of March 2021, the Independent newspaper revealed that would-be holidaymakers were struggling to find vacancies to book.
Whether you reserve it for your own holidays or plan to let it out to some of those many visitors, you are almost certain to need holiday home insurance – and here’s why:
- much as you might like it otherwise, at the end of the day a holiday home is just that – a second home to which you retreat when the opportunities arise, but where you do not live the whole year round;
- there are likely to be significant periods, therefore, when your holiday home stands empty and unoccupied;
- an empty property (i.e. one that is still furnished but has no one sleeping there) is significantly more vulnerable to loss or damage than one that is lived in all of the time;
- the need for repairs may go unnoticed when there is no one at home, and an unoccupied home tends to attract all manner of unwanted attention from the likes of burglars and other intruders, vandals and even arsonists;
- as our guide to UK holiday home insurance makes clear, therefore, the specialist policies we arrange typically can take into full account these periods when your second home is likely to stand empty and provides appropriate cover accordingly;
- with suitable holiday home insurance in place, therefore, you may retain the comprehensive cover for both the building and its contents even when your property is unoccupied;
- if you are buying the holiday home with the help of a mortgage, the lender typically insists that suitable insurance remains in place at all times, including periods when the property is unoccupied;
Letting your holiday home
- for many holiday home owners, a second home also offers the opportunity for earning a little extra cash from short-term lettings to visitors and holidaymakers when you are not using it;
- indeed, HM Revenue and Customs (HMRC) grants certain tax concessions if your holiday home is made available as a furnished let for a minimum period of the year – as explained in an advisory note published on the 6th of April 2021;
- when your property is let on such an occasional, short-term basis, however, you are no longer the sole owner-occupier, nor yet a full-time landlord in the ordinary sense of the term – so, neither standard home insurance, nor regular landlord insurance is likely to meet your need for cover;
- instead, specialist UK holiday home insurance is specifically designed to meet precisely that dual-purpose use of your second home;
- in addition to the standard risks of loss or damage to your property, some (but not all) policies may also extend cover to damage – malicious or otherwise – caused by the tenants to whom you have temporarily let your holiday home.
If you are the fortunate owner of a holiday home in the UK this coming summer – or, indeed, at any time of the year – therefore, you might want to carefully consider your need for specialist UK holiday home insurance.
What is a UK holiday home?
A holiday home is usually regarded as a property you own and which you use exclusively for your own recreational purposes – or those of close family members – during a few weeks each year.
A UK holiday home could also be one that you plan on letting out to paying guests.
As far as holiday home insurance is concerned, you might want to bear in mind that some policies differentiate between a holiday home used exclusively by you and one you run as a business (by letting it to paying guests).
An important distinction lies in the fact that a holiday home is not your normal place of domicile. Although you may be liable for local taxes and charges, you will not usually be on the local electoral register and the property will not be occupied by you for 365 days each year.
What does holiday home insurance cover?
If you have arranged any kind of property insurance before – on your own home or as a buy to let landlord, for example – you will recognise the principal elements of cover incorporated in holiday home insurance:
The building and its contents
- central to that cover, of course, is the protection of the building and its contents against such major and potentially disastrous risks as fire, storm damage, flooding, escape of water, impacts, vandalism, and theft;
- it means anticipating a worst-case scenario in which the whole property is destroyed and needs to be rebuilt, with the total building sum insured equivalent to that cost;
Landlord insurance
- you may also need the provision of cover during those times when your holiday home may be let to paying tenants;
- there are different risks when the property is occupied by tenants rather than yourself – not least your liability as a landlord in the event of one of them being injured or having their own property damaged and claiming against you for compensation;
- your UK holiday home insurance needs to indemnify you against those liabilities as a landlord;
Unoccupied property insurance
- holiday homes in the UK are likely to spend significant periods of time when they are unoccupied – either by you or by short-term tenants;
- recognising the special risks associated with an empty property, UK holiday home insurance also covers such periods.
Whatever kind of holiday home you own in the UK and however you intend to make use of it, therefore, a specialist provider of this distinctive insurance product is well-placed to help you find the most suitable cover.
Further points to consider
In some cases, holiday homes may be subject to special conditions, potentially raising several further issues:
- they might typically be positioned in locations that are rather more prone to flooding than might be the case with permanent residences – if your holiday home is located on the coast, alongside a river or adjacent to a lake, for instance, there may be special provisions relating to flood insurance cover;
- you may find that the cover levels for your contents are more restrictive due to the fact that your property will sit unoccupied for much of the year – or, with paying guests, the fact that your contents may be more liable to damage;
- you may, at times, be required to ask someone in the area or a local property management agency to periodically inspect your holiday home when you’re not there in order to spot and arrange for the repair of any problems that have arisen;
- your policy will typically require you to be in full compliance with the law and local authority regulations – it is worth noting that these can be significantly different depending upon whether the property concerned is in England, Scotland, Wales or Northern Ireland.
How to find the most suitable UK holiday home insurance
As we have seen, holiday homes in the UK call for a special type of property insurance.
The product in question is appropriately enough called UK holiday home insurance and is specially tailored to suit your use of the property as a second home or one that is let to visiting holidaymakers.
So, if this is the insurance you are looking for, how do you go about obtaining the most suitable cover?
Rely on the experts
As at the time of writing, there are almost half a million second homes in the UK – a figure that has grown by more than 30% in the past five years alone.
Not only are there numerous holiday homes dotted around the country, however, but there are many different types of property fitting that purpose – and some may be used solely as the owner’s holiday home, also used to accommodate short-term tenants during holiday seasons, or even left empty and held as a longer-term investment.
UK holiday home insurance, therefore, needs to be tailored to suit each one of these different types of holiday home and the uses to which the property is put. The insurance needs to recognise whether it is a second home for the exclusive use of the owner, a holiday home that is also occasionally let to tenants, or a property that stands empty for most of the time.
Matching your particular needs and circumstances to the appropriate UK holiday home insurance, therefore, may call for the experience and expertise of a specialist broker – such as ourselves here at Cover4LetProperty.
Just as the British Association of Insurance Brokers (BIBA) points out, our role as an independent broker means that we put your interests first and foremost, looking for the most suitable insurance cover at a competitive rate, to ensure that you receive good value for money.
