Getting the Right Insurance for Your Holiday Home
Posted on: 28 November 2014 by Vickie Harrison
If you’re lucky enough to own your own holiday home then you want to be sure you’re protecting your investment – just as you would your primary home. However making sure you’ve got the right insurance cover can be confusing, so here’s a guide to help you make sure you’ve got the right cover in case anything goes wrong.
The Right Cover
A holiday home is vulnerable to the same risks as your main home. The roof could be damaged by a storm, flooding could ruin the decor, or a burglar could break in and steal your wide-screen TV. If you own a second home, you therefore need both buildings and contents insurance. However, standard insurance like you have on your primary home just isn’t enough as insurers won’t pay out if the property has been left for more than 30 days a year; and even if you’re renting your property out when you’re not there they also usually exclude letting periods so you’re likely to still exceed the 30 day limit. This is because unoccupied properties are a risky business for insurers as there’s a greater chance of something like a burst pipe or leak going unnoticed and causing widespread damage. Theft is also a bigger issue, and when let tenants won’t necessarily take as good care of the property as you would if you were there. You therefore need both buildings and contents insurance cover specifically for second or holiday homes.
Buildings insurance covers the structure of the property such as the roof, and permanent fixtures and fittings like baths and fitted kitchens against a range of risks including fire, flood, storms and subsidence. If you either have a mortgage on your second home or choose to take one out, the lender will insist that you have buildings insurance in place; even if you own the home outright, it would be unwise to ignore buildings insurance. You need to ask yourself: ‘Could I afford to rebuild from scratch?’ If the answer is no, you should definitely purchase buildings cover that at the very least covers the cost of re-building your home in the event of a catastrophe, including any outbuildings and swimming pools. Often people mistakenly believe the re-build value is the same as the market value, but this isn’t the case. If you’ve recently taken out a mortgage the valuation should give you a figure, or if not you can appoint a surveyor to value your home.
While not compulsory, again ask yourself ‘Could I afford to replace everything in my home?’ Again, I’m guessing the answer is no – in which case you should take out the appropriate contents insurance. Even if you don’t think you keep anything particularly valuable in your holiday home, try adding up the cost of all the furniture, electronics and other belongings – as well as the potential emotional loss of pictures and mementos. It may be a lot more than you thought! Try not to leave too many personal or valuable items in your holiday home when it’s unoccupied – You’re asking for trouble if expensive laptops and the like are on display. Your insurer might impose a limit on the value of any one item, and even exclude some valuables if they are left in the house when it is let or empty, so check the terms carefully before you sign.