Have your personal circumstances changed?
Do you need another income?
Are you thinking of renting out your holiday home, for extra income?
With very limited travel abroad over the last 2 years, holidaying in the UK has never been so popular. There has been a 300% increase in UK holidays.(1)
Are you thinking it is time to capitalise on this and rent out your own holiday home to the public? If you are, it’s not that straightforward. Along with having all the relevant checks etc, updating the furniture, and then deciding how you will market your property, many people think that their existing home insurance will cover them, but it’s not that simple.
You may be enjoying the view from your hot tub, but most insurers holiday homes comes with increased risk.
Holiday homes can be left empty for long periods of time, so are more vulnerable to theft, weather or water-related damage and, there’s a further risk of personal injury or accidents.
To ensure you are fully protected, you’ll need specialist holiday home insurance designed to protect you, your house and any holidaymakers who rent it.
Andy Piggott, Managing Director of Grosvenor Insurance Brokers says: “The risks differ to those of an average household or second home. Guests may not take as much care when using the property, so owners must protect their investment and have the appropriate insurance in place. Not just for peace of mind, but financial support should a problem arise”.
“When considering a policy,” he continues, “you should know exactly what risks are being covered and determine what is and isn’t important for your specific needs. It is also important that you understand the obligations you’ll have for the policy to be valid. For example, the maximum period that the property can sit empty and the installation of certain safety and security devices.”
Why can’t I get standard buildings and contents cover for my unoccupied home?
Most providers will not insure properties that are left unoccupied for more than 30 days at a time, which is why you need specialist insurance.
What makes my property a holiday home?
The main criteria which make a property a holiday home is how you use it and how often you go there. If you just use the home for your holidays and you don’t visit frequently, then it’s likely to be classed as a holiday home. If you have a property that you visit more frequently, say for work or to visit nearby relatives, then it could be considered a second home in insurance terms.
What to include in your holiday rental insurance
Your holiday let insurance package will need to include more than just comprehensive building and contents insurance.
If you are letting your holiday home, public liability insurance is essential and must be included in the policy. Public liability insurance protects against compensation claims made by a guest staying in your property in the event of accidental injury. As health and safety are so important, we always appraise each property carefully and discuss any concerns with the owner before it can go live and receive guests.
Add to that employers’ liability insurance for cleaners, gardeners and any staff who help you run your holiday let. Again, wood-burning stoves, swimming pools, saunas and hot tubs all pose risks, and your policy should cover the equipment and people using it.
What inclusions do you need to consider further?
To benefit from your holiday home, there are certain inclusions you should add to your policy. You’ll need protection for loss of rental income if your property can’t be let. For example, after a flood, replacement accommodation cover if your guests have to stay elsewhere.
Insurers tend to identify different types of damage. So, make sure your holiday home contents insurance covers accidental damage, malicious damage and if you welcome animals, damage caused by pets. Unfortunately, theft can happen too, so check for exclusions.
Water is the main threat facing holiday homeowners, so be clear on your water damage cover. In some instances, unless you comply with specific policy conditions while your home is unoccupied escape of water claims is excluded.
Again, if your water is metered and there’s a leak, are you covered for the bill? For backup, add 24-hour home emergency cover to include a plumber.
Overseas holiday home insurance for English speakers
If your property is overseas, a UK insurance company specialising in international properties is a popular option. This means your policy documents will be in English and you’ll have access to English-speaking claims experts.
Insurers regard overseas homes as higher risk as they may be empty for longer, so comprehensive contents and buildings insurance is essential. In areas with extreme weather and earthquakes, cover restrictions may apply.