Whether it’s your personal retreat from the rat race, a place for family holidays, or a property you occasionally let to generate additional income, your holiday home is likely to be a valuable asset.
While enjoying those benefits, though, you may also need to keep in mind that your second home faces different risks – especially if it is empty for much of the year – from your main home. Understanding those different risks means you may need to pay special attention to choosing UK holiday home insurance that is appropriate to the way the property is used.
The following checklist highlights some of the key areas holiday home owners may wish to consider when arranging holiday home insurance.
Buildings insurance
Insurance that protects the structure and fabric of your holiday home is typically at the heart of your insurance policy. Cover is also likely to include the fixtures and fittings of the dwelling.
You may want to ensure that the total building sum insured accurately reflects the current rebuilding cost in the event of a total loss. That sum is not the same as what you paid for the property or its present market value. You can use the Building Cost Information Service’s house rebuilding cost calculator, sponsored by the Association of British Insurers (ABI), to estimate this figure.
Contents insurance
Even a holiday home may include contents requiring suitable protection against loss or damage.
Contents insurance is likely to cover a wide range of items from furniture to kitchen equipment, televisions and electrical appliances to soft furnishings, and outdoor furniture in many cases. While the policy limits may define the scope of cover for the holiday home’s contents, you may want to consider specific cover for higher-value items.
Liability indemnity
If one of your guests, a visitor, neighbour or contractor is injured, or their property is damaged in connection with your holiday home, you may be held legally liable and required to pay compensation.
Those risks are likely to prove more than usually apparent if the home is let to holidaymakers. You may want to ensure that the policy you choose incorporates suitable property owners’ liability insurance to indemnify you against liability claims.
Protection against common risks
Holiday home insurance policies are many and varied. A careful reading of the relevant policy documents may help you to understand whether the cover meets your particular requirements and that any conditions and exclusions are acceptable.
Depending on the policy you choose, risks commonly covered in this type of insurance typically may include:
- fire;
- storm damage – including impacts from falling trees and branches;
- escape of water; and
- theft.
Some policies may also offer – as optional extras – cover against accidental damage or malicious damage caused by your paying guests or their visitors.
Unoccupied property conditions
Your holiday home may be empty for weeks or even months at a time between your own visits or the turnover of paying guests.
If your second home is unoccupied for longer than 30 to 45 consecutive days (an interval likely to vary from insurer to insurer), you may find that insurance cover may become restricted or, in some cases, cease altogether.
In any event, your insurer may impose strict conditions to mitigate the risks of loss or damage while the property remains unoccupied. These may involve heightened security precautions, regular inspections of the property, maintaining an ambient temperature during the winter, and in some cases draining down the water systems.
To maintain your insurance cover, it is important to comply with any conditions required by your insurer. Check with your holiday home insurance provider for clarification.
Before buying a policy: your checklist
Here is a simple holiday home insurance checklist:
- confirm an up-to-date estimate of recbuilding costs – refer to the calculator sponsored by the Association of British Insurers (ABI);
- accurately calculate the replacement value of all your contents;
- declare to your insurer the proposed use of the holiday home – especially if you intend to let it to paying guests;
- read and understand the insurance policy exclusions;
- check claims settlement excesses;
- review the insurer’s unoccupied property conditions; and
- compare the features, benefits and policy conditions of similar policies rather than choosing on price alone.
Conclusion
Suitable holiday home insurance may depend on several factors including the location of the property, the manner and frequency of its use, whether it is occasionally or mostly occupied by paying guests, and the home’s value and contents.
These considerations, together with differences in policy terms, conditions and exclusions, can make choosing the most appropriate cover more complicated. If you’re unsure which policy is most suitable for your needs, you may wish to discuss your requirements with our team here at Alan Blunden or obtain a UK holiday home insurance quote.
Disclaimer: This article is intended as general guidance only and does not constitute financial or insurance advice. Holiday home insurance policies, cover limits, terms, conditions and exclusions vary between insurers. Always read your policy documents carefully and check with your insurer or insurance broker if you are unsure what cover applies to your circumstances.
