Holiday let insurance isn't a legal requirement, but you should consider it. If you own holiday homes that you let holiday go-ers, consider specialist insurance coverage that fits your property the best.
Holiday let insurance policies differ from providers; each property owner will need a unique cover set depending on their property.
Holiday let insurance, sometimes called holiday cottage insurance, protects your holiday home, you and any paying guests against potential losses caused by extreme weather, theft, fire, water and burst pipes.
The property counts as a second home if you stay less than 120 days yearly. You'll need specific holiday let insurance to create a rental income from your second home.
Holiday let insurance differs from holiday home insurance; you mainly need home insurance if you live on the property for an extended amount of time. You'll need holiday let insurance if you're renting out a holiday property, so ensure you get the correct insurance so you're covered if anything does happen to the property.
Holiday insurance coverage isn't legally required. Still, if any damages were to occur to the property, you could risk hefty costs for replacing its contents or fixing the building itself. With the right insurance policy, you don't have to worry about paying for the potential damages that could occur whilst guests rent the property.
What Are the Different Types of Holiday Let Insurance Cover
There are different types of holiday let insurance you can apply for; some policies may include a range of coverage, but not all will.
Your property type and the amount of coverage you need will determine your insurance.
The different types of holiday let insurance include:
- Public liability insurance: Protects property owners from legal expenses and compensation should you be found liable if the guest suffers injury, illness, disease or death during the stay at your holiday property.
- Contents insurance: Provides compensation for claims for loss or damaged or stolen items within the property caused by hosting activities. It may include cover for fires caused by guests.
- Buildings insurance: Covers the main structure of the holiday building, including permanent fixtures and fittings such as roof, ceilings, walls, floors, and fitted kitchens and bathrooms if damaged.
In the following sections, we dive deeper into each insurance policy and explore how each will protect your property.
Public Liability Insurance
Public liability insurance protects property owners from legal expenses and compensation should you be found liable if the guest suffers injury, illness, disease or death during the stay at your holiday property.
Public liability coverage isn't compulsory, but it could save huge payouts if a guest experiences an accident on or off your property. If you let your property via an agency, there may be contractual obligations to have public liability coverage, so check with the company that is helping you let the property see if you need the coverage before you apply for the insurance.
You should consider the following factors when determining your public liability insurance policy:
- Property features: If you have additional features in your property, such as a swimming pool, hot tub or open fire, you will want to mention them to your insurer so they can be covered in your policy in case they cause any harm to your guests.
- Stairs, pavements, and flooring: If you've got steep stairs, uneven pavements, or slippery flooring, they could be additional risks for your residents. You must check your policy to cover potential problem areas and add appropriate signs and warnings to the property.
- Other potential hazards: Look at your holiday homes and see if there is anything that could cause harm to your guests; the more you're aware of the risks, the more you can add to your coverage.
As well as making sure the above factors are included in your policy, use them as a reminder to get these things checked for health and safety so you can try to avoid potential accidents.
Contents Insurance
Contents insurance compensates for claims for loss or damaged or stolen items within the property caused by hosting activities. The insurance covers items within your property from damage or theft. Most insurers have a limit on how much coverage you can get for individual items or a limit on the total cost of a claim.
You will need to take inventory of all the content within the property and list their estimated values; this way, you can determine how much coverage you need and use the information in any claims that may arise.
When taking out contents insurance, you'll want to consider the following factors:
- Individual items: Some items can only be insured to a certain amount. You should check with the insurer if there are any items they won't cover so you know before there are any potential damages. You will want to include a cover for items like televisions or a coffee machine in your policy. If any contents are accidentally or maliciously damaged, you can hopefully have them easily repaired or replaced with your insurance cover.
- Guests: Ensure your policy covers paying guests; some policies only include damage by family members for second-holiday homes and not for commercial letting. Check with your insurer before you apply.
- Pets: Some holiday go-ers like bringing their furry friends with them. Consider if your insurance covers pet damage if you allow pets on your property. Not all insurers include pet damage, so you should ask for this if you allow pets.
Buildings Insurance
Buildings insurance covers the main structure of the holiday building let, including permanent fixtures and fittings such as roof, ceilings, walls, floors and fitted kitchens and bathrooms if damaged. The insurance policy covers any permanent structure within the grounds of your holiday home, including outside structures like a swimming pool.
Your holiday home is protected in the following circumstances:
- Weather damage: Any damage caused by natural disasters like storms, floods, avalanches, or other extreme conditions.
- Malicious damage: Physical loss or damage caused by maliciousness, smoke, riot, flood, fire, explosion, or hail.
- Issues with household fixtures: If any water or oil is escaping from household fixtures, the policy will cover your property in the event of leaks or burst pipes.
Buildings insurance should cover the rebuild cost of your holiday home if the occasion ever calls for it. So, you will need to know what it will cost to rebuild it, as the property's market value differs from the actual cost it takes to build.
To ensure you get the right coverage, you will need to use the services of a chartered surveyor to get an accurate figure to ensure your insurance policy covers the entire cost. Hence, you're not out of pocket if you have to rebuild the property.
Essential factors to consider when looking for buildings insurance:
- General wear and tear: Most insurers do not cover general wear and tear in the policy. If you have a high turnover of guests, wear and tear is bound to happen, and this is up to you to pay for, repair or replace.
- Under-insuring: If you give the wrong value of your property, you could be underinsured, which means if the property needs rebuilding, you may have to cover some or all of the costs yourself.
- External and internal structures: Ensure you include external structures and internal swimming pools, sheds, and any outdoor structures as part of the property value and cover. If you mention them to your insurer, they will be covered under the policy.
- Winter warranties: There may be limitations or restrictions on the empty property for long periods. If you don't have enough bookings, or it is winter, you may find yourself without residents for a little while; you will need to see if the insurer has any restrictions on how long the property can be vacant.
- Property changes: Whilst insured, if you make any changes to additions to the property, like expansion or maybe you've extended the decking and added a hot tub, you will need to inform your insurance provider as soon as you've made those changes so you can get them covered. Your insurance premium will increase, but at least you'll have the peace of mind that your new additions will be added to your insurance policy.
Cover for Theft
It's unlikely your property will have someone inside at all times, and it's not uncommon for burglaries to occur on holiday rentals as they're left unoccupied frequently.
Even when the property is occupied, guests can make the mistake of leaving a window open or not locking the property correctly so that someone can gain access that way. Simply, guests could light-fingered and take items with them. You will need protection against theft of items on your property.
You will want to ensure your insurance covers theft by unforced and forced entry. However, insurers usually require you to have security measures in place for cover to be valid. Consider getting a lockable box for key collection, remind your guests about property security, and ensure you have the necessary security measures. Otherwise, your insurance may be invalidated.
What Is the Best Holiday Let Insurance?
No two-holiday homeowners will have the exact needs or property, so the “best holiday let insurance” is unique to each property owner.
You must consider the best cover for your property and paying guests.
Consider the following cover for your holiday let insurance policy:
- Legal expenses: You want to ensure your insurance covers any legal costs that may occur from any potential claims process. Ensuring legal expenses are included in your policy will protect you from losing money if there are any claims. Most policies have it, but check first in case you need to pay extra to add it.
- Emergency travel expenses: If your property is abroad, or if you live outside the UK and the property is in the UK, and you're required to travel due to issues with the property, you may be able to get the costs covered by the insurer. If you manage the holiday let remotely, this is an excellent cover to have.
- Loss of income: Some insurers offer pre-booked rental income cover. If there are any occasions the property can't be lived in, you may want to get cover for loss of income. Policies may limit how much protection you get, but some cover is better than none.
- Alternative accommodation cover: If issues occur to the property whilst a guest is staying, they can no longer stay there; for example, if a fire or burst pipe occurs, your insurer can cover the cost of alternative accommodation for your guest.
- Employers' liability insurance: If you employ any staff to help with your property management or cleaning, consider employers' liability insurance. If one of your employees becomes unwell or injured whilst working, they could sue you for negligence. Having employers' liability cover will help reduce the cost of claims.
- Public liability cover: As discussed earlier, you can get separate insurance for public liability cover, but some policies may already include it.
- Multiple properties: If you own numerous holiday let properties, you could get a better insurance deal if you get insurance from the same insurer. Having all your properties insured by the same provider saves costs and is easier to manage.
Leading Holiday Let Insurance: The Verdict
We will reiterate that holiday insurance isn't compulsory, nor is it illegal to go without. However, if you own holiday homes that you rent out, you could save yourself some money if anything were to happen to the properties.
With insurance, you can continue earning money from your holiday home knowing if it's harmed by weather conditions, accidental damage or malicious damage, your insurance company will handle the cost.
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