If you own a second home, you also have ready access to extra earnings by letting it out from time to time. Though it’s likely to be an attractive way of generating additional income, remember that letting the holiday home is likely to change your responsibilities and risks as far as your holiday home insurance is concerned.
Be aware that your current second home insurance may not be adequate to meet your needs once the property is let. Let’s see why.
Why letting your holiday home changes your insurance requirements
Even though you might be letting out your holiday home only once in a while, the property’s designated use switches from personal residential to commercial use.
Under that new class of use, the property is exposed to different, additional risks such as:
- the public liability you may face in the event of injuries to paying guests or damage to their property;
- the risk of malicious or accidental damage caused by your temporary tenants; and
- the greater risks posed by a likely higher than usual rate of occupancy.
These critical changes in circumstance will make the world of difference to your holiday home insurance in the UK. Choosing the most appropriate holiday home insurance cover is important.
What does UK holiday let insurance typically include?
The principal headings are likely to be familiar to other types of property insurance – but the risks are specifically targeted towards letting your holiday home and may include the following:
- buildings insurance is at the heart of holiday let insurance, for instance, and typically is designed to protect the structure and fabric of the property against loss or damage;
- contents insurance may be especially important if your holiday home is a furnished let;
- public liability insurance offers vital indemnity against claims from guests or tenants who have suffered an injury or had their own property damaged;
- loss of rental income if an insured event (such as a fire or flooding) leaves your holiday home temporarily unusable;
- malicious or accidental damage caused by your tenants (typically available as an optional extra to standard holiday let insurance).
Depending on your chosen policy, there may be specific exclusions – such as damage caused by visitors’ pets, the exclusion of cover during parties held in your holiday home, or restrictions on long-term letting.
Occasional letting vs. regular letting – why it matters
If family and friends occasionally use your second home, you may still want the advantages of safeguarding the property with holiday let insurance.
If you are letting more regularly and advertising on platforms such as Airbnb, VRBO or Booking.com, an insurer is likely to classify your property as a holiday let business – and you will therefore need some form of short-term let insurance. Some insurers may also ask to know how many weeks a year you intend to let your second home.
In any event – and as with all insurance matters – the validity of any cover depends on your answering all material questions honestly and accurately.
Airbnb and holiday platforms: what their host guarantees don’t cover
If you are advertising on the Airbnb platform, is insurance for Airbnb available? You will have noticed that Airbnb offers what it calls a Host Guarantee. But the platform itself recognises that the Host Guarantee – which is not a regulated insurance product, offers only limited liability, and falls short of comprehensive cover – is no substitute for holiday let insurance.
Tips for insuring a holiday let property
UK holiday homes are there to be enjoyed – and by arranging the appropriate holiday let insurance, you can do just that.
A specialist insurer with expertise and experience in second home insurance is well-placed to find you the cover that brings security and peace of mind – just remember to be honest and open about just how the property will be used.
Further reading: Guide to UK holiday homes and How to choose the most appropriate UK holiday home insurance.
