Is your place in the sun protected?
Planning to visit your country retreat or jetting off to your holiday home anytime soon? You are probably not alone. Second homes are becoming more and more popular, in 2017 research identified that 1 in 10 adults have a second home1.
Overseas holiday homes in Spain, France, Portugal, Italy and Florida are the current top destinations for Brits purchasing a home overseas.2 In Spain, for example, Britons accounted for 19% of purchases of Spanish homes by overseas buyers in 20163.
With many parts of the world suffering from natural disasters, it is important you take the time to ensure you have adequate holiday home insurance. In the UK alone 19% of all home insurance claims are for storm damage.4 Natural disasters aside, unfortunately sometimes things can go wrong and without adequate property insurance the cost of rectifying these problems can mount up. For example, the average claim for a burst pipe is £25,000!5. Whether you have a holiday home in the UK or overseas it’s worth checking whether you have an appropriate level of insurance so you’re covered should the worst happen.
- Check your sums insured
It is important to regularly check the replacement costs for your contents to avoid being underinsured in the event of a claim. Most specialist insurers provide appraisal services for UK residences, however they won’t always provide this service for holiday homes abroad. Not all insurers will automatically increase your sums insured in line with inflation, so be sure to regularly check that your sums insured is suitable. It is also worth considering whether you want to state your sums insured in the currency of where your holiday home is located. This may help you avoid any underinsurance due to exchange rate fluctuations. It is possible to have a policy from a UK based broker or insurer but with the sums insured detailed in euros.
- Estimate when your holiday home will be occupied
Most insurers expect a lower occupancy level for holiday homes, however if you’re likely to leave the property unoccupied for over 30 days, speak to your broker or insurer as additional conditions may apply. By providing your broker or insurer with an accurate account of how often you visit your holiday home they can give you the fairest terms and premium.
- Advise if you’re letting out your holiday home
Many holiday home owners take advantage of the earning potential of their property by letting it out for extended periods of time. This can be very beneficial but could impact on your insurance premium or cover. So make sure your broker or insurer is aware if you let out, or plan to let out, your holiday home. But be aware that not all insurers are receptive to subletting activity.
- Take steps to manage property risks
When arranging your holiday home insurance your property will be assessed on its individual merits. The insurer will look at the steps you’ve taken to manage your property while it’s unoccupied, and will likely be able to offer better terms where you have reduced or eliminated a risk that could lead to a claim. For example, if you have arranged for regular inspections of the property to be carried out, or if you have security measures such as fire and intruder alarms or water leak detection devices.
- Disclose all relevant information
It is vital that all the facts about your holiday home are given to your broker or insurer when your policy is taken out. Failure to tell them about a situation or significant detail could cause difficulties if you ever need to make a claim. This includes letting your insurance broker or provider know about any local issues that may affect your property such as subsidence or risk of earthquake, fire or flood.
- Consider language barriers and local laws
If your second home is abroad and you aren’t fluent in the language, approaching a local insurer of the country where the home is situated could be problematic due to language barriers. You may not be aware of the local laws and practices of the legal system in a foreign country, and interpreting a policy wording which is not in your native language is no easy feat. It can also make things more difficult should you ever need to make a claim.
Whether it’s a cottage in the Cotswolds or a Chateau in Cap Ferrat you will want to ensure it is adequately insured to allow you and your family to continue to enjoy it for many years to come.