Holiday lets sit in an awkward space when it comes to insurance. They look like homes. They are lived in. Yet the way they are occupied is fundamentally different. Guests change regularly, responsibility never does, and there are often stretches when no one is there at all.
Holiday let insurance (sometimes referred to as second home insurance or holiday home insurance) exists because these patterns do not sit comfortably within standard home insurance.
The issue is not whether a property is attractive, rural, coastal or modern. It is how it is used, and how insurers assess risk when that use changes week by week.
Why holiday let insurance is different from standard home insurance
Most home insurance assumes continuity. The same people. The same habits. The same level of familiarity with the property. Once those assumptions fall away, policy wording and the type of insurance cover you have starts to matter far more than many owners expect.
Short-term stays and guest turnover
In a holiday let, no two stays are quite the same. Guests arrive with different expectations, routines and levels of experience. Some will be careful. Others less so. Even small things – unfamiliar heating controls, complex appliances, or unclear instructions – may typically become sources of accidental damage.
Increased wear and tear
Insurance doesnât cover things wearing out over time. That applies whether a property is lived in by an owner or let to guests. Whatâs different with a holiday let is that items tend to be used more often and by more people.
Furniture, fittings and furnishings are likely to see heavier use, and insurance written for holiday lets is set up with this higher level of day-to-day use in mind, rather than assuming the property is occupied in a steady, long-term way.
Liability exposures when renting to the public
Once a property is let to paying guests, it is no longer purely private. The owner takes on responsibility for the safety of people who may have no prior knowledge of the building, the layout or its quirks. Public liability cover is central here, not as an optional extra, but as a response to the reality of letting to the public.
What holiday let insurance should include
There is no universal checklist that fits every holiday let. What matters is whether the cover matches the risks that actually exist, not the ones an owner assumes are most likely. It is also important to note that different policies may offer different elements of cover, so the following should be used as a guide only ..
Buildings cover for rental properties
Buildings cover applies to the structure itself – walls, roofs, floors and permanent fixtures – against insured events such as fire, storm or escape of water. For holiday lets, the critical point is that cover allows for occupation by paying guests and is based on realistic rebuilding costs, not market value.
Contents cover for furnished holiday homes
Furnished holiday lets often contain far more than a standard rental. Furniture, appliances and soft furnishings may typically be part of the guest offering. Contents cover needs to reflect both the quantity and the quality of what is provided, particularly where the property is marketed at a higher standard.
Public liability (crucial for paying guests)
Public liability insurance addresses claims made by guests or visitors following an insured incident. This might involve injury, or damage to personal belongings. It is one of the areas where using the âwrongâ type of policy can have serious consequences. You can read more here: Liability insurance and landlords.
Accidental and malicious damage by guests
Accidental damage is one of the most common concerns for holiday let owners. Some holiday let insurance policies extend to this; others do not. Malicious damage may be available in certain circumstances, but is often subject to tighter conditions and higher excesses. (The excess is the amount you are financially liable for in the event of a successful insurance claim).
Loss of rental income after insured events
If a property cannot be used following an insured incident, bookings may need to be cancelled. Loss of rental income cover may respond during the repair period, usually for a defined time and based on evidence of actual loss.
Alternative accommodation
Where an insured event disrupts a stay, alternative accommodation cover may assist with rehousing guests. The scope of this cover varies among holiday let insurance policies. If you are ever unsure as to what your cover provides, please contact us.
Employer liability (cleaners, gardeners, contractors)
Where cleaners or maintenance workers are employed directly, employersâ liability insurance may be required by law. This is often overlooked by owners who view their holiday let as a side activity rather than a business because:
- the holiday home feels âprivateâ rather than commercial;
- cleaners or gardeners are long-standing and trusted;
- payments are informal or irregular;
- the property is only let part-time.
What happens if you donât have it and someone is injured
If employerâs liability insurance is required but not in place, and a worker is injured or becomes ill as a result of their work at your property:
- you may be personally liable for compensation, legal costs and damages;
- any claim typically would not be covered under your holiday home or holiday let policy;
- legal costs alone can be significant, even if the injury is relatively minor.
Insurance cannot usually be added retrospectively once an incident has occurred.
Potential legal consequences
If employerâs liability insurance is required and you do not have it:
- you may be in breach of UK law;
- the Health and Safety Executive (HSE) can impose fines, which can be substantial;
- you may also be required to pay backdated penalties.
This applies even if the injury was accidental and even if you were unaware the cover was required. From an insurance and legal perspective, these factors do not remove responsibility.
What you should do if you are unsure if you need employersâ liability insurance
If you are not certain whether employerâs liability insurance applies to your holiday home:
- check whether anyone works at the property under your direction;
- ask contractors for proof of their own insurance;
- speak to a specialist holiday let or property insurer;
- avoid assuming public liability cover alone is sufficient.
Some holiday let insurance policies may typically include the option to add employersâ liability cover.
You can read more about employersâ liability insurance here.
Understanding the risks of short-term rental properties
Risk in a holiday let is not constant. It shifts with season, occupancy and how the property is managed.
Fire and escape of water
Guest use of cooking facilities and unfamiliar appliances can increase the likelihood of fire-related claims. Escape of water remains a frequent issue, particularly during colder months or following periods of non-occupation.
Seasonal risk patterns
Busy periods bring higher footfall and heavier use. Quieter periods introduce different concerns, including security, maintenance and environmental damage.
Empty periods and unoccupancy rules
A property does not need to be empty for long before insurers may treat it as unoccupied. Once that threshold is reached, additional conditions often apply. This is where holiday let insurance and unoccupied property insurance intersect most clearly. Further reading: Guide to unoccupied property.
Security risks
Key safes and access codes offer convenience, but they also create exposure. Reasonable security precautions are usually expected, especially when the property is not in use.
Holiday home insurance vs holiday let insurance: whatâs the difference?
The distinction is not cosmetic. It is functional.
Holiday homes
A holiday home or second home is usually occupied privately. Insurance for these properties often mirrors standard home insurance, with some allowance for extended non-occupation.
However, this does not mean that a standard home insurance policy can be used to insure a holiday home. Home insurance is typically written on the assumption that the property is either a main residence or only occasionally unoccupied, and that it is not let to paying guests or used in a commercial way.
Holiday homes are often empty for longer periods, may be visited less frequently, and may be used differently from a main residence. These factors can affect how insurers assess risk and apply policy conditions, particularly around security, inspections and escape of water.
Using a standard home insurance policy for a holiday home can therefore lead to restrictions, additional conditions, or in some cases a lack of cover if the propertyâs use falls outside the policy terms. This is why holiday home insurance is arranged separately, even where the cover may appear similar at a glance.
Holiday lets
A holiday let is operated commercially. Guests pay to stay, and the owner retains responsibility throughout. Insurance for holiday lets is therefore broader, reflecting public liability exposure and the potential impact of lost income. Using second home insurance or a home insurance policy for a commercial holiday let can leave significant gaps and may cause issues with your mortgage provider.
Further reading: Thinking of letting your UK holiday home? Hereâs how it changes your insurance needs.
Your mortgage and your holiday let insurance
If your holiday let is subject to a mortgage, lenders generally require that appropriate buildings insurance is maintained throughout the term of the loan. Insurance arrangements are usually expected to reflect the actual use of the property.
If a property is insured on a basis that does not accurately describe its use, this may result in policy conditions or limitations that are not aligned with lender requirements.
In essence, having the incorrect type of property insurance (such as having standard home insurance for a second home) could see you in breach of your mortgage agreement.
Property owners may wish to review both their mortgage terms and insurance documentation to ensure consistency.
How to compare holiday let insurance policies
Price alone rarely tells the full story. And policy features and benefits, as well as terms and conditions, can vary among holiday let insurance providers. Things to consider include, but are not limited to:
- does the policy clearly allow short-term letting to paying guests?
- is public liability included?
- are contents limits realistic?
- how does the policy treat guest-related damage?
- what happens during empty periods?
Flexibility around non-occupation is often where meaningful differences appear.
Your responsibilities under the terms of your cover
Insurance for holiday homes and holiday lets is based on the assumption that certain reasonable steps are taken to look after the property, particularly when it is not occupied. These steps are usually set out in the policy wording and are often referred to as policy conditions. These obligations may vary depending on your policy provider, but examples may typically include:
- draining down water systems to reduce the risk of burst pipes and leaks; or
- maintaining a minimum ambient temperature inside the property, usually to prevent freezing
Which option applies, and when, depends on the policy and how long the property is unoccupied.
Regular, logged visits are another common requirement. This usually means checking the property at set intervals to look for signs of damage, leaks, forced entry or other issues that may need attention. Insurers often expect these visits to be recorded, for example with dates, times and brief notes.
Other obligations may include:
- keeping doors and windows securely locked;
- setting alarms where fitted;
- turning off water or utilities when required;
- arranging prompt repairs if problems are discovered.
These conditions are not there to make claims difficult. They reflect the higher risks associated with properties that are empty or used intermittently. If a claim arises and the policy conditions have not been followed, this may affect how the claim is handled.
For this reason, it is important to understand your responsibilities under the terms of your cover and to check what applies during periods of non-occupation. If anything is unclear, it is sensible to ask for clarification so you know what is expected before a problem occurs.
Further reading: Winter and your unoccupied main or holiday home: what insurers expect.
Summary: The correct policy protects you and your guests
Holiday let insurance is not about adding more cover for the sake of it. It is about ensuring the policy reflects how the property is actually used – by different people, at different times, with periods of change in between.
At Cover4LetProperty, we specialise in insurance for properties with non-standard occupancy, including holiday lets and unoccupied periods. To find out more and to get a no-obligation insurance quote, please visit our UK holiday home insurance product page or call our dedicated UK based team on 01702 606 301.
