Holiday Home Insurance can be one of the most difficult types of insurance policy to obtain. Whilst it is very easy to obtain quotations for standard home insurance, you will find this cover is usually only offered by specialist companies. The reasons are fairly straight forward, most insurers do not like the often prolonged periods of un occupancy that are associated with holiday or second homes, properties are sometimes left for months on end with no occupants. These periods of un occupancy can lead to an increased susceptibility to insurance claims. If a property is unoccupied and not heated correctly, the insurer may face an increased exposure to water peril claims, the property may become a target for vandals or squatters and also having an unoccupied property may lead to ongoing damage not being noticed for a period of time, thus increasing the exposure to a potential loss. Off course different countries have different risk exposures, in the United Kingdom for example, bursting pipes in winter is an identified risk
Holiday home insurance from a specialist company will usually be able to afford you a policy that contains a wide range of insurance perils that will be based on a standard home insurance but with certain terms and conditions added to deal with the fact that the property is a holiday or second home. Premiums will generally be higher than for an owner occupied property. If the property is let to tenants, the liability insurance will have to be extended to take this in to consideration. Before purchasing your holiday home insurance, it is vital that you study the providers Keyfacts document and carefully understand the terms and conditions of the offer. Whilst the perils on offer may look fairly similar, you may find that the contract contains certain restrictions or requirements that will need a little thought for you to be able to implement. For a claim to be valid under any insurance contract, you must have complied with the policy conditions. If you are in any doubt as to your responsibilities under the policy, always ask, before you accept cover. When you have received you policy document from the insurance company, you have a further 14 days cooling off period in which to study what has been offered to you. You can use this period to fully understand the product you have been sold. It you feel the product is unsuitable for you, you can normally return it during this period for a full refund.
Holiday home insurance covers a property that has been purchased or acquired with the main intention of using it as a second property for short term usage. Properties are either acquired for own personal use or for renting to tenants. The difference between a holiday home and a building that has been purchased for renting to tenants as a buy to let , is usually defined by the period of rental, in the United Kingdom, a holiday let should not be for a period in excess of 31 days and most people will stick to this ruling as it has certain tax implications. Properties that have been purchased for renting to tenants as say a buy to let, are offered usually on a minimum of a six months assured short hold tenancy agreement.
There are certain qualifying tests that determine if a property is a UK holiday home that can qualify for tax concessions.
- Be located in the United Kingdom.
- Be offered as a Holiday Let fully furnished.
- Be available for holiday letting to the public for a minimum of 140 days per annum.
- Be actually let out as a holiday home for a minimum of 70 days per annum.
- The holiday lets provided must be provided at a commercial rate, not given to family and friends etc.
- Be let on a short term basis for a period not in excess of 31 days.
- Not be let to the same person for a period in excess of 31 days.
- Be Be let as a holiday home for at least 7 months of the year.
Of course if you have purchased your home or cottage for your own personal use as either a holiday property or second home, then you are not going to be worried about the above criteria. For holiday homes abroad, you are usually able to obtain fairly similar cover, although it must be remember that all countries have different rules and regulations ( and taxes) that relate to property insurance. Also many countries have covers that are peculiar to them, in Spain for example it is usual to include Fire Brigade charges under an insurance policy, France has some fairly unique additional liability covers and Turkey has special requirements for Earthquakes. Purchasing holiday home insurance abroad thus needs careful consideration and an experienced international insurer should be used, that is used to being able to deal with local considerations and taxations. Before making any purchase you should thus consider the following:-
- Is the Insurance policy being offered suitable for my needs.
- Am I using the property for the purpose the policy has been designed for.
- Is the list of perils adequate and has the insurer confirmed they include local covers.
- Am I happy I can comply with the terms and conditions
- Are the local taxes being taken care of by the insurer.