Insuring your holiday home

What is holiday home insurance?

Holiday home insurance is a type of home insurance designed for properties that aren’t your main residence. It can be taken out as buildings cover, contents cover or a combination of both. It protects your vacation property in the same way as standard home insurance, covering you for repairs, break-ins and more.

Where it differs is that it offers cover for specific risks. For example, it covers your property when it’s unoccupied, which can be often if you’re between guests or too busy to take a break. 

Holiday homes are typically more at-risk when nobody’s home. Not only is an empty property attractive to burglars, but any leaks or damages could go unnoticed for long periods of time, potentially leading to further repair costs down the line.

Specialist holiday home insurers know that you’ll be coming and going, which is why a period of unoccupancy will be factored into your cover. You should let your insurer know if you plan to let your property and they can add that to your policy. If you change your mind at any point, then you’ll just need to get in touch with your policy provider.

Is holiday home insurance a legal requirement?

No, you’re not legally required to insure your holiday home. However, if you take out a mortgage, it may be a condition of securing your loan.

There’s also the matter of finances to consider. Insurance is a way to protect your investment and any additional income if you let your holiday home. Without it, you’d need to be able to pay for any damages or repairs out of your own pocket. In a worst-case scenario, you may need to sell your property if you can’t afford repair work.

How do I choose the right policy?

There’s no one-size-fits all approach to holiday home insurance. What’s suitable for a cosy lodge won’t be the same as a six-bed lake house.

Before you go shopping for quotes, you should work out what you want your policy to include. The first thing to decide is whether you want to insure just your bricks and mortar with buildings cover or protect your contents too.

If you add on contents cover, you’ll be covered for any repairs and replacements for your furniture, appliances and soft furnishings.

This can be particularly useful if you’re letting your property, as you can’t always be certain that your guests will look after your belongings. However, it’s worth noting that most policies won’t cover your guests’ contents.

You should also bear in mind that some insurers will only cover holiday homes across England, Scotland, Wales and Northern Ireland. If your holiday home is outside of the UK, make sure to check the specific policy terms when you’re looking for a quote.

Insurance for holiday lets

If you’re letting your property, there are certain features that might be useful to include in your policy. For example:

• Loss of rent cover - This will cover any rent you lose if your guests have to move out due to an insured event.
• Key cover - This covers the cost of replacing locks, handy if your keys are lost, stolen or copied by a guest.
• Alternative accommodation cover - This provides cover if your holiday home becomes unfit to live in and your guests need to stay elsewhere. For example, if there’s a flood or a fire.

What’s included in your policy will depend on the insurer and your chosen level of cover. That’s why it helps to have an idea of what you want to include in your policy before you search the market.

If you aren’t sure where to start, you may want to work with an insurance broker. At Wesleyan Financial Services, we can advise you on the right cover level based on your holiday home. We’ll also reach out to insurers on your behalf, to find you a range of quotes.

If you’re interested in learning more, see how we can sort your holiday home insurance.

Do I need property owners liability insurance for holiday lets?

Property owners liability cover protects you as the property owner if you rent out your holiday home.

It covers costs and damages if someone is injured or falls ill while staying at your property. It’s useful if you’re taken to court by a guest and found liable, as it’ll cover any compensation you’re required to pay on top of any legal fees.

Accidents happen all the time, even if you’re careful. For example, a guest may be electrocuted by a faulty appliance or fall due to an ill-fitting carpet.

While it’s not a legal requirement, it does provide extra financial protection. And as it’s included in most holiday home insurance policies, you may not have to pay an additional cost for that added peace of mind.

Do I need insurance if I'm hosting on Airbnb?

Letting your property through Airbnb offers you some protection. For example, you’ll get reimbursed for damage caused by guests to both your home and belongings. You’ll also get liability cover to protect you if a guest is hurt on your property.

It’s important to note that Airbnb damage protection is not a type of insurance, only the liability cover is.

If you’re looking for comprehensive cover then you should still consider taking out holiday home insurance. It’ll cover gaps that Airbnb protection doesn’t provide, like alternative accommodation cover and legal cover.

How much does holiday home insurance cost?

What you can expect to pay for your holiday home insurance depends on:

• Your property value (including contents if you’re adding contents cover)
• Where your property is situated
• The size of your property
• How often it’s occupied
• Whether it’s a personal or rental property
• The level of cover you need

When you apply for a quote, an insurer will assess all of these factors to see how much of a risk it would be to insure your holiday home. The bigger the risk, the more you’re likely to pay.

What makes holiday home insurance expensive?

An example of a higher-risk property would be one that’s unoccupied for lengthy periods of time, typically 30 days or more. If this is the case, an ‘unoccupancy clause’ may be added as part of your insurance agreement. This will require you to check in on your property from time to time.

You may also pay more for your policy if your holiday home is made from non-standard materials. For example, a log cabin or a thatched-roof cottage. This is because it could be more expensive to make repairs to properties of unusual structure.

Another factor that can bump up costs is the location of your property. For example, an inner-city apartment could cost more to insure than a countryside abode due to the crime rates in that area.

How can I reduce my insurance costs?

While some pricing factors will be out of your control, there are some ways you can save on your holiday home insurance.

• Shop around
  
  Searching the market is a smart way to see all your options. You can do this yourself or through a specialist insurance broker.
  
  A broker will have the expertise to assess your needs and find quotes on your behalf. It can be useful to get advice if you have a property that’s classed as non-standard (not your typical bricks and mortar building) or one that will be empty for long periods of time.


• Get the right level of cover
  
  When you’re looking for a policy, it’s important make sure you’re getting the right cover level. Over-insuring your property will see you paying higher premiums than you need to, whereas underinsuring could mean you don’t get enough of a payout when you make a claim.
  
  If you’re under-insured and your payout is less than you need, you may need to cover the shortfall from your own pockets, which could have a significant impact on your finances.


• Lower your risk
  
  If you know your property will be deemed high-risk by an insurer, you could take some preventative measures. For example, if the property is in an area known for break-ins, you may wish to install a security system, add CCTV and upgrade your locks. Its worth checking with your insurer before taking this step, to see what impact these measures might have.
  
  If the surrounding area to your property is at risk of flooding or subsidence, you could consider getting the experts in. They can suggest changes to your grounds to lower your risk, like the addition of flood barriers or the removal of problem trees.


• Pay for your premiums annually
  
  Most insurers will give you the option of monthly or annual payments. While monthly payments will have less of a dent on your wallet in the short term, you could save money overall by choosing to pay each year. This is because monthly payments often include interest.


• Look for discounts
  
  If you’re a Wesleyan member, you could be eligible for our 20% discount on holiday home insurance. And if you’re in the market for other insurance policies, we offer the same discount for car, travel and more.
  
  There’s also your no-claims bonus to consider. Many insurers will offer you a discount on your policy if you don’t make a claim, so you may want to cover the cost of any smaller repairs where you can.


• Increase your excess
  
  Your excess is the amount of money you need to pay your insurer when you make a claim. You’ll have the option to bump up your excess, which usually results in a lower overall premium. Just bear in mind that you’ll need to be able to afford this excess every time you make a claim.