If you are – or are intending to be – one of the estimated 5.2 million people in the UK who owns a second home whether for letting out or purely your own use, what do you need to know about UK holiday home insurance?
What is UK holiday home insurance?
UK Holiday Home Insurance from Cover4LetProperty is aimed at people who have a second home, or a holiday home that they let, in the UK.
Using standard owner-occupier home insurance to cover a holiday let or second home will not suffice. This is because properties of this type tend to face different and often increased risks than a standard home.
If you have the ‘wrong’ type of buildings and / or contents cover for your holiday home, you could find it is invalid. If you require verification on any aspect of the cover which most suits your needs, therefore, then please call us free on 0800 970 7172.
Before addressing the question of what does UK holiday home insurance cover, though, let’s see why insurance for a second home in the UK needs to be distinguished from other types of property insurance.
Distinguishing different types of property insurance
On the face of it, for example, it might seem that UK holiday home insurance is likely to share many similarities with the following:
- home insurance is the name generally given to two distinct types of insurance used to protect the principal home in which you live;
- the two parts are building insurance and contents insurance – although they protect separate aspects of your home, they are commonly bought as a combined policy and you typically earn a discount on the premiums for doing so;
- the two are certainly widely held products – the latest figures published by the Association of British Insurers (ABI), for example, show that out of nearly 27 million households in the UK, more than 20 million have contents insurance and 17 million also have building insurance;
- just as the terms suggest, building insurance protects the structure and fabric of the building itself against such – potentially major – events as flooding, fire, storm damage, escape of water, impacts, theft and vandalism, whilst contents insurance protects against the same risks, but to the belongings and possessions you keep in the home and may also extend to accidental damage;
- to the extent that your UK holiday home also needs protecting against similar risks, it is similar to your standard home insurance policy with respect to the building and contents insurance;
- as far as your insurers are concerned, however, the two types of cover differ in at least three crucial respects;
- the use of your holiday home is just that – not the home in which you permanently reside, but one used solely for the purpose of holidays;
- as a holiday home, there may be significant periods during the year when it is unoccupied – and vulnerable to all the additional risks which may be faced by an empty property; and
- if you choose to let your holiday home to others, there are periods during which the property is occupied by tenants – whom insurers regard differently to owner occupiers;
Holiday home insurance
- at Cover4LetProperty, we regard holiday home insurance as falling somewhere between standard home insurance and landlord’s buy to let insurance;
- holiday homes have a specific use as a second rather than primary place of residence, they may be occupied by their owners, by tenants, or stand empty for certain periods or seasons of the year;
- holiday home insurance, therefore, is in a class of its own.
Do you need it?
Do you need specialist holiday home insurance? To uncover the answer, it might be helpful to consider some of the basic principles of property insurance.
If you are a property owner, there is at least one simple and compelling reason for your insuring it:
- you are likely to have made a significant investment in its purchase;
- the building and its contents are vulnerable to a range of risks and perils, with the possibility of considerable damage or everything being totally destroyed;
- without property insurance, you have no financial help in repairing the damage or rebuilding the property; so
- you risk the loss of every penny you have invested.
If you are buying any property with the help of a mortgage, the lender is almost certain to insist that you have building insurance to protect the structure and fabric of the property – the lender, of course, has an interest in safeguarding the security of the loan.
The same principles apply to the purchase of a second or holiday home.
What UK holiday home insurance covers
Insurance is all about risk. And risks are clearly influenced by the way in which a property is used. Your main residence is used in one way, as your permanent home, whilst any second home is used in another way – as a holiday home.
That difference in use is critical as far as any insurer is concerned and might be illustrated by reference to just two amongst a number of important aspects. Unlike your main home, for example, your holiday home:
- might be let to paying tenants or other visitors at various times during the year; and
- at other times of the year, it might stand empty and unoccupied altogether.
Both sets of circumstances leave your second home more vulnerable to risks to which an owner occupied home is not exposed.
For reasons such as this, specialist holiday home insurance is required, and standard home insurance is unlikely to suffice. Indeed, if you are relying upon standard home insurance, make a claim, and it is subsequently discovered that the property is being used as a holiday home, you might find your claim rejected.
To avoid any such unhappy conclusion, you might want to contact us here at Cover4LetProperty to arrange specialist insurance for your holiday home.
We have also produced a Guide to UK Holiday Homes which provides some useful information, too.
Specialist holiday home shares a principal concern with your standard home insurance in the protection of the building and its contents. The building sum insured needs to be sufficient to cover the cost of clearing the site and reconstructing the property if it is a total loss – razed to the ground in a fire, for instance – whilst contents insurance also needs to reflect the cost of repairing or replacing items that are damaged, lost or stolen. In both cases, it is important to avoid the twin risks of being either over or underinsured.
With respect to insurance of the contents, you might want to consider the inclusion of all-risks protection for accidental damage and bear in mind that some policies offer settlement of damaged or lost contents on the basis of “new for old“, whilst others deduct a value for depreciation or “wear and tear”.
Public liability insurance is typically included in your holiday home cover and this may be especially important if the property is to be let to tenants. If a tenant, one of their visitors or a member of the public suffers a personal injury or has their property damage and claims that you have been negligent as the property owner, you may face a substantial claim for damages.
When you compare holiday home insurance, you might also want to look out for those that offer some – or even all – of the following extra advantages:
- immediate online quotations from specialist providers and buy online;
- loss of rental income and alternative accommodation costs;
- cover for periods when the property is unoccupied (subject to terms and conditions being met);
- cover for permanently installed swimming pools, fixed jacuzzies, hot tubs and spas, tennis courts, drives, patios and terraces, walls, gates and fences and fixed fuel tanks under the buildings section of the policy;
- options for accidental damage and breakages by the owner and / or guests – including malicious damage;
- buildings and contents cover for theft, fire, lightning, explosion and subsidence;
- frost damage to fixed water tanks, apparatus or pipes;
- replacement of locks following theft or loss of keys;
- property owners’ liability insurance up to £5m;
- cover for domestic staff (e.g. cleaning or gardening staff) up to £5m.
Different types of UK holiday home
When considering insurance for a second home in the UK, bear in mind, too, that the properties themselves may come in all shapes and sizes.
They include the picture-postcard, chocolate-box cottage in a peaceful English village, or a beach house somewhere along the coast, of course, but the recent boom in staycation holidays means that holiday homes now also include luxuriously appointed lodge-style cabins – sometimes equipped to a higher standard than you might find in your own permanent home.
All are highly sought-after as holiday lets and, so, offer the opportunity for you to earn a little extra income through letting the accommodation to others for short periods of time. Property Reporter on the 9th of January 2019, for example, predicted that holiday lets would see a boom in the coming year.
Insurers invariably consider any property which is let to tenants – on however short a stay – to be more than usually vulnerable to loss or damage.
Specialist holiday home insurance – filling the role of holiday let insurance – is a necessity, therefore, to ensure that your interest not only as the owner of the holiday home, but also as its occasional landlord, is fully and appropriately covered by insurance.