The moment that you have dreamed of for a long time has just come to pass and now you are the proud owner of a lovely holiday home in the country or by the coast that feels like your second home. Or maybe you’ve bought it mainly for its investment potential? Either way, you will want to feel confident about protecting this valuable asset. So without further ado one of the immediate things you need to organise is a good holiday home insurance policy.
Assuming you already own property in your home country, you will be familiar with this type of insurance. However holiday home insurance differs due to the risks associated with this type of cover. Many holiday homes will be left unoccupied for periods of time and may also be rented out to holidaymakers to make money from the investment. Another consideration can also be if there is a swimming pool on your newly acquired property, this also carries risks from an insurer’s perspective.
A holiday home carries the same risks as any other home, but these are amplified by the fact that it may be unoccupied for periods over 30 days. Also you and the insurer cannot be confident about the visitors you will have, how they will treat the property and its contents. So when choosing the provider and policy, you will need to be extremely careful to ensure that it covers all eventualities. Firstly we’ll look at what information an insurer will require from you and then we’ll examine the standard cover you need to know about.
This final question is often a very difficult one to answer for owners, and there is a calculation tool on the website of the Association of British Insurers.
The very first thing you need to know is what, if any, special conditions apply to the country or the location of your holiday home. For example, if the property is in certain locations, such as Greece or Italy, the insurer will not give you earthquake cover. Or is it located in an area with a higher flood risk? There are some restrictions that can apply to different geographical locations. Confirm this with your insurer.
In a worst case scenario and you needed to claim for the rebuild cost, firstly you need to be sure you had this calculated correctly. Please refer to the calculation tool on the Association of British Insurers’ website, or a similar organisation in the relevant country. The next consideration is whether your insurer index links the rebuild cost or not. Some do and some don’t. If it is not index linked then the rebuild value needs to be updated on a regular basis. Finally, it is possible to buy a second home insurance policy that offers you unlimited cover. This means that regardless of estimates and inflation, you can feel confident of your cover.
In this specialist insurance type you will need to get empty property cover, for the times that you are not in the property and you don’t have any bookings from holidaymakers.
Whether you bought the second home as a pure investment or as a holiday home that you would use but make some money out of it by renting sometimes, you will want to have loss of income cover. This is for when there is some type of damage to the property itself or its contents, which prevent pre-booked holidaymakers from staying. Also if you don’t have guests, but damage prevents you from staying in your holiday home, then this cover applies also. You may have to stay at other accommodation that costs you money, because of the damage.
It is wise to get additional cover for accidental damage, especially if you are renting out the holiday home. However it is a good idea anyhow, as accidental damage can be caused by a family member or friend staying with you.
Buildings insurance covers a variety of things that could occur such as water leaks, frost damage, fire, flooding, theft, vandalism and falling trees.
Contents insurance covers your contents for many of the same eventualities as buildings insurance. Although it is not compulsory you may regret not having this cover. It could surprise you how much it would cost to replace your contents.
Legal liability covers you in the case of an incident or accident occuring to another person on your property. This is essential.
If there is a pool on the property you will need this to be covered. It falls under legal liability but you will need to adhere to a variety of safety guidelines such as appropriate warnings, safety covers, barriers and pool access, alarm systems and safety covers.
Now that you know these essential facts, you are well equipped to deal with finding the best policy for your wonderful asset.