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Effective Insurance For Holiday Homes
If you are the owner of a holiday home you will need to take out another insurance policy in addition to one that covers your main residence. Taking out insurance for holiday homes is not the same as a normal home insurance policy. Your property may be left unoccupied for long periods and this makes it at a greater risk of damage or theft.
Additionally, if you allow others to occupy your holiday home, the conditions of the policy may be void. This is why it is important to understand exactly what is covered by insurance for holiday homes and whether there are special terms and conditions attached to the cover.
Insurance for holiday homes is split between buildings and contents cover and the level of cover is an important consideration. Most insurance companies see holiday homes as a greater risk than a main residence. The possibility of long periods when the home is unoccupied is one reason. In addition, many holiday homes at the coast suffer from storm related damage and this also makes them a greater insurance risk. This articles covers some of the details to think about when taking out insurance for holiday homes.
What Is Holiday Home Insurance?
A standard home insurance policy is split into two parts and insurance for holiday homes has the same format. The two elements of a policy are buildings and contents. Building insurance provides cover for the property structure and will pay for damage caused by burst pipes, storms and subsidence. Specific cover is needed for subsidence in areas where this is prevalent. You can get a policy that also covers outbuildings and a pool if this is required.
The contents part of the policy covers anything that is not part of the building. So, furniture, fabrics and carpets plus you can ask for extra accidental damage cover. Do not make the mistake of asking for a standard home insurance policy as this could be null and void if you do not let your insurer know that the property is a holiday home.
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Why Do You Need Insurance For A Holiday Home?
The reasons for insuring a holiday home are the same as those that apply to a main residence. If the property is mortgaged the lender will insist that a buildings policy is taken out. Even if you do not have a mortgage you will want to take out cover against fire or storm damage. Failure to do this can result in hefty bills for repairs. When calculating the cost of fully rebuilding a holiday home you should take into account any extras like a swimming pool, tennis court or any other outbuildings.
It has probably cost some thousands of pounds to equip your holiday home with furniture, a kitchen and all the other fixtures and fittings that make it comfortable. Unless you are willing to take the risk that all visitors will be extremely careful, taking out a contents holiday home policy is essential. The insurer may require a burglar alarm to be fitted as well as deadlocks and window locks. Ask the company what special measures are needed to ensure that the policy remains valid.
Make sure you tell your insurance company your property is used as a holiday home. Failure to do so could result in your home insurance policy being cancelled or void.
What Else Is Covered By Holiday Home Insurance?
In addition to the building and contents cover, insurance for holiday homes can cover accidental damage and provide public liability. Accidental damage provides cover for any serious breakages that are caused by visitors or by the owners. Public liability covers any legal costs that could arise if someone is injured whilst staying at your holiday home.
If you let out your holiday home and have an agent who provides cleaning services or work in the gardens you may want to add employer’s liability insurance to the policy. This covers anyone who is working legitimately on your property.
One final extra that can be added is legal expenses which provides funds to cover legal fees should a dispute arise between the owner and any temporary tenant.
Holiday Home Insurance FAQ
Is There An Excess On Insurance For Holiday Homes?
Most insurance policies carry an excess and holiday home insurance is the same. The standard excess is £50 for claims for loss or damage. Higher excesses will apply for water damage, subsidence or landslip. Check the excess before signing the insurance policy application.
Are There Exclusions On An Insurance For Holiday Homes?
Most holiday home insurance policies will include some specific exclusions so you should ask your insurer. Typical exclusions are if the property is left unoccupied for a long period of time, theft due to neglect (no forced entry) and loss of pre-booked rentals. Loss or damage due to wear and tear will probably be excluded.
Is Holiday Home Insurance The Same As Second Home Insurance?
No, insurance for holiday homes is a special policy that takes into account the fact that there may be regular changes of tenant. It also covers risks such as long term unoccupany which could result in theft or damage. Holiday home insurance may also require higher cover for third party liability and legal costs. You must advise your insurer that the policy is for a holiday home or cover could be void.
Obtaining A Quote For Holiday Home Insurance
Before asking for a quote for insurance for holiday homes it is important to assess the level of cover that you need. Calculating rebuilding costs and whether to go for ‘new for old’ contents cover are just two of the questions you need to consider before asking for a quote. Some companies will not issue cover if you live in a different country to the property and most will insist on some high degree of security. This may include a burglar alarm, shutters, window locks or grilles on the windows.
Once you have ascertained what the insurers will need you can go to a comparison website to get a quote. Read the small print carefully as the cheapest option may not give you the cover you need. The insurer may also insist on the building being of a standard construction. So, if your holiday home is a caravan or static you may need to apply to a specialist company for cover.
How Much Does Insurance For Holiday Homes Cost?
The average figure quoted for insuring a holiday home in 2020 is £265 per annum but each policy is different so your premium may be more. Having the correct cover for your holiday home is vital unless you are willing to pay for the possibility of theft of contents and damage caused by fire, flooding or storms.
Choosing the lowest premium is not necessarily the best plan and each company may have different restrictions for cover. What is important is to consider what the cost would be of replacing damaged furniture or expensive electrical items and even having a total rebuild.
An insurance company will use many factors to assess what premium is charged and the premium will be based on the rebuild valuation and how much it would cost to replace all the contents. You may be able to negotiate a lower premium if you can prove that the home is kept in good condition, regularly checked and has good security. If you add any extra cover the premiums will be higher. However, getting the best cover and not necessarily the cheapest is the optimum outcome of buying insurance for holiday homes.
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