Why do you need holiday home insurance?

Although insurance is not a legal obligation for owners of holiday homes in the UK, we would certainly recommend having a policy in place. By doing this through an approved insurance company, you get extra peace of mind in the event of any accidental damages occurring to your property. Plus, they can cover many unwanted and unexpected costs. 

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Holiday Home Insurance

If you own a house or rent your property out in the UK, you may need to take out a holiday home insurance policy, also known as ‘holiday let insurance’. This type of insurance will cover your home, and any valuable items within it, should any damages occur. It’s not currently a legal obligation to have this in place however, home insurance can provide extra security and help with any unexpected costs should anything go wrong.

Standard home insurance in the UK comes in the following three forms:

1. ‍Buildings insurance - this covers the cost of repairing any damage to the structure of your home if it’s damaged or destroyed as a result of subsidence, fire, flooding or vandalism. This can include walls, foundation, roofing materials and any elements of water supply used in the construction of a house.
2. ‍Contents insurance - this covers loss or damage to all things in your home that aren’t part of the structure or building. This can include furniture, appliances, paintings, statues and any other items that are deemed as valuable.
3. ‍Landlords insurance - this covers a lot of the same things that your regular home insurance does, but it goes further to cover the risks of renting your property out to tenants. It can cover buildings, contents, accidental damage, loss of rent, liability and even rent guarantee.

Should you require a mortgage for your main home or your holiday home, the mortgage lender will require you to have the relevant buildings insurance in place. This is to protect you from sustaining a loss and not being able to afford your mortgage payments.  

Other types of household insurance policies in the UK

Rented accommodation - as a tenant you are not required to take out buildings insurance for the property that you rent, this is the landlord’s full responsibility. However, it is recommended that tenants take out a contents insurance policy to cover any personal belongings such as electronics, clothing, furniture, household appliances, etc.

Non-standard homes - these are houses or flats that are either built from non-standard building materials, have different types of roofs, are listed, are large or have other non-standard characteristics. For example, a building that is in a high risk area, such as near water, in a forest or in a mountainous area. For these types of rentals, you will need a special type of insurance policy.

Luxurious properties - owners of expensive and luxurious properties are unlikely to take out a standard policy due to the financial risk involved. There are special insurance plans available for these types of premises - they tend to cover properties with more than six bedrooms or those that are valued at more than one million pounds. 

Subsidence - this occurs when the foundation of your house collapses or sinks. It can often be caused by soil shrinking/swelling due to the weather, nearby trees/shrubs absorbing the moisture in the soil beneath the house, or leaking drains surrounding the property. All this can have consequences for the value of your property and can greatly increase the cost of your home insurance. 

Holiday let insurance - this type of insurance is what holiday home owners are required to have if renting their home out to paying guests.Typically it covers your property and contents for loss or damage due to events such as theft, flooding, storms, escape of water, subsidence or fire. In some instances it can cover non-paying guests or holiday lets that are empty for 30 days or more. All this depends on which policy you choose. 

It's important to bear in mind that insurance for your holiday home will cost more than what you pay for your main home. This is due to the increased risks involved. It’s wise to do your research before taking out an insurance policy on your home, and to ensure that you have the right protection to cover all possible circumstances - no one is immune to force majeure! 

FAQs

1. ‍Can I claim on my insurance if a tenant damages a window?
   Yes, in most cases you will receive full compensation for the cost of the broken window. Many insurance policies will cover damages to buildings and contents such as carpets, a broken door or even an alarm system that stops working. It’s best to check what exactly is covered by the insurer before signing up to the policy - that way you can be certain what is covered and what isn’t. 
2. ‍If there is an emergency in the house due to water, gas or electricity, would this be covered by an insurer?
   In most cases yes however, it’s best to check this with your insurance provider just to be on the safe side. 
3. ‍How much does a typical holiday home insurance policy cost?
   The cost of each policy is calculated on an individual basis. The price depends on the individual features of the house, for example, the material your house is made of, the age and size of the property, whether there are any additional buildings within the premises, whether it’s rented out on a short or long term basis, and what the rental terms are. 
   Once the insurer has gathered all the relevant information, they will be able to provide you with a quote according to your specific requirements. 
4. ‍Why does it cost more to insure a holiday home than a standard home?
   Holiday home insurance tends to cost more as the property being insured is considered high-risk. 

Contact us

If you have any questions about this blog or require any further information on holiday home insurance, speak to a member of our in-house team by calling on 020 3989 3442 or email london@smarthost.co.uk. 

**Please note that this blog should not be taken as formal advice. If you are unclear on any of the information mentioned above, you should always seek professional advice.**

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