Holiday lets come in all shapes and sizes, and sometimes, the more unique your property, the more successful it...
Owning your own holiday home can be very lucrative, but, as with any investment, there can be some associated risks. The good news is, these risks can be significantly reduced by purchasing a holiday home insurance policy that will cover costs of certain, unfortunate events that may occur from time-to-time.
Unsurprisingly, with there being many different types of insurance available, there can be much confusion when holiday let owners try to choose the most appropriate insurance for their holiday home. In this post, we highlight the different types of cover available.
Similar to landlord’s insurance for long-term rental properties, holiday let insurance covers cottage owners who let their property to paying guests on a short-term basis.
Whilst holiday let insurance is not necessarily required by law, without insurance you’re vulnerable to costs associated with any unfortunate events, such as accidents or damage to your building or possessions. Additionally, if you purchase a mortgage for your holiday home, your mortgage provider may require you to have specific insurance policies in place.
When it comes to holiday let insurance, there are various types of cover available. Here we outline the different areas you may want to consider when purchasing your holiday let insurance.
This covers your holiday home’s structures, fixtures or fittings should they be damaged by a fire, flood, storm damage, burst pipes or subsidence. Buildings insurance often includes outbuildings, fences and swimming pools.
How much building insurance you need is not defined by your property’s market value or the size of your mortgage, but, instead, is determined by the cost of rebuilding your property. If you’ve recently taken out a mortgage on your property, you may be aware of what this figure will be, otherwise, this can be calculated by a surveyor or by using the Association of British Insurers’ calculator.
This type of insurance specifically covers items contained within your property from damage or theft. Many insurers impose a limit on how much they will cover for individual items or the total cost of any claim. To determine how much contents insurance you require, create an inventory of all of your items and their estimated values. Not only will this give you a good idea of how much your possessions in the property are worth and how much contents insurance you require, it may also be useful if you ever need to make a claim. Be sure you check that your contents insurance covers accidental damage caused by paying guests and not just by family members.
There’s no doubt that the demand for pet-friendly holidays is increasing. Here at Sykes, we’ve taken away more pets than children during the last 12-months. So if your property accepts pets, then you’ll want to be sure that your contents insurance will also cover damage by your furry guests.
The need for public liability insurance is huge as without it, you are potentially exposing yourself to paying large sums of money to guests who have accidents in your property. Certain features, such as swimming pools or hot tubs, come with a higher level of risk than others, however, event without such features, accidents may still occur in your property and you ought to be covered for these unfortunate events.
View our landlord’s health and safety guide.
Holiday lets can be vulnerable to burglars as they can be often left empty and guests can be relaxed on ensuring all doors and windows are secure. You’ll want to be sure that your insurance covers you for theft by unforced entry, should one of your guests leave a door unlocked.
Sometimes holiday goers can be dishonest and steal items from your property. If this is a concern for you or you have expensive items in your property, you’ll want to ensure you are covered for theft by paying guests.
Some insurance policies require you to have certain securtiy measures in place, such as having a lockable box for key collection. Be sure to check what security measures you are required to have in place.
For advice on how to protect your property from burglary, view this guide.
In the unfortunate event your holiday let becomes uninhabitable, you’ll want to know exactly what you’re covered for. Here are three main things you’ll want to consider:
If your property is occupied at the time it becomes uninhabitable, you may be responsible for finding your guests alternate accommodation. Having insurance that covers the expense of this will ensure the associated costs don’t come out of your own pocket.
Loss of rental income
If your holiday let becomes uninhabitable for a long period of time due to an insured event, such as an accidental fire or burst pipe, you may be required to refund future bookings if they can no longer be kept. If you can’t afford to lose this income, then it may be wise to purchase an insurance policy that covers this.
Emergency travel expenses
If you don’t live locally to your holiday let or are often traveling, you may want to consider getting an insurance that will cover any emergency travel expenses you may incur as a result of you being required to get to your holiday let because of an insured event.
For many holiday goers, hot tubs are an essential appliance and cottage owners have been quick to maximise their rental incomes by adding them to their properties. If you have a hot tub or are considering purchasing one for your holiday let, you’ll want to ensure both the appliance and the associated risks are covered under your insurance policy (including any liability of guests using it).
Your holiday let is particularly vulnerable when left empty for long periods of time, especially during the winter months when pipe bursts, for example, are far more common. These events could prove even more costly if they’ve gone unnoticed due to the property being empty. It’s particularly important for you to check how long your property can be left empty for without invalidating your insurance as you wouldn’t want an expensive mishap to come out of your own pocket. There may be specific clauses you’ll need to adhere to, such as draining water tanks or maintaining a minimum temperature.
Insurance you take out on your holiday let may be tax deductible. Dependent on how much tax you pay, this could result in your insurance policies costing you very little.
You’re probably wondering how much all of this will cost? Well, that really depends on what types of cover you’re purchasing, alongside other factors, such as your location. Buildings insurance is determined by the cost of rebuilding your property and the cost of contents insurance can be affected by the value of the items in your holiday let.
* At the time of publishing (22nd September 2017), Sykes Cottages has taken all reasonable care to ensure that the information contained in this article is accurate. However, no warranty or representation is given that the information is complete or free from errors or inaccuracies. Generic information is contained within this article, further advice should be sought from an insurance advisor.
*Based on a 7 bedroom property in the Lake District with bookings between October 2017 to September 2018.
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