Introduction - 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.
