« back to news

Holiday homes insurance for peace of mind


Holiday home ownership presents people with an attractive proposition. Many people are now buying holiday homes in their favourite areas as a means of having a second home that they can enjoy and also as a means of providing an income via short term holiday letting. People can then choose to retire to the property or to sell it – although the income realised is taxable, as the tax man considers holiday home ownership to be earned income and so you are taxed accordingly.

Sometimes it can be extremely difficult to obtain insurance for holiday homes – the main reason being that they are often left empty for considerable periods of time: this leads insurers to become worried about theft, vandalism, burst pipes and flood claims. Should your holiday home be in Spain, you will be less at risk of flooding than if it is in the Lake District, for example – and your insurance premiums will reflect this. If your holiday home is abroad, the insurance will reflect local perils and also their tax regulations (often also considered a peril!) Public liability insurance is important if you are letting out your property for commercial purposes (and even if just to family and friends). Even if you are only letting your property out for a few weeks of the year it is vital that you inform your insurance company. Failure to do so may mean that in the event of a claim you do not receive full cover.

When you arrange your holiday home insurance, the same principles apply as to standard home insurance. You will need to calculate your building sum insurance and make sure this is adequate as well as providing a new for old replacement value on the holiday home contents. Many insurance companies will not want to insure valuable items that are left in the holiday home, such as jewellery and antiques etc. Make sure you compile a proper inventory of items in the holiday home and photograph larger items. At the start of the rental period point out to your guests that any breakages should be paid for and the method by which you intend to take payment. Serious incidents such as fire and flood and theft must be reported immediately.

Make sure your insurance is in place before you let out your property, do not be tempted to deal with this later. There are rules and regulations to running this type of business and you have obligations you must fulfil before the property can be let to tenants. Gas appliances must have safety certificates and electrical appliances need to be checked also – and don't forget that soft furnishings must be fire-retardant. Your local letting agent or council can offer advice and help you comply with all legal requirements.

There are some simple 'housekeeping' rules which take the sting out of turning your dream home into a money earner, and these include:

> Arrange for the property to be kept looking tidy at all times
> Make sure pipes are well lagged
> Arrange for the removal of post, circular and free newspapers etc
> Install an adequate security system
> Drain down the water system and switch off electrics during periods of non-occupancy
> Consider the services of a professional letting agent if you can afford it
> Arrange for someone local to keep an eye on the property when empty
> Make sure the property is fully compliant with all necessary regulations
> Make guests aware of their responsibilities – a handbook is a good idea
> Make sure payments clear before you release the keys to the property
> Take a security deposit which truly reflects the value of the contents of the property
> Prepare a detailed inventory
> Clearly state when you will be returning their deposit
> Ensure that your insurance policies are up to date and sufficient to meet your needs

Take professional advice, talk to Westhill Insurance Services, they have expert knowledge on holiday home insurance and can guide you through the maze. It is never easy letting your property to strangers (or even family and friends for that matter), so make sure you are fully insured against accidental damage and also burst pipes etc. Don't be tempted to with-hold from your insurance company the fact that the property is empty for periods at a time – Westhill Insurance Services are an independent insurance company and will find the best deal for you. As honesty really is the best policy, give Westhill a call and let them help you keep your holiday property in tip-top condition.

Contact Westhill Insurance Services, today.

Posted on 25th April, 2011