Holiday home insurance UK

What is holiday home insurance?

Insurance for holiday homes covers second properties that are not your primary residence. So, if you own an additional residential home that isn’t used as your primary address or for long term tenants, then holiday home insurance is for you. By contrast, home insurance is targeted at owners or renters living in the insured property most of the time. There are other differences between a typical home policy and house insurance for a holiday home as well. Some of these include:

• Occupancy period: Second homes are usually unoccupied for longer periods than primary residences. Typical home policies usually only allow your home to be unoccupied for no more than 30 days at a time as standard. 
• Insurance risk: Properties that aren’t used as a primary residence may be viewed as being a higher risk compared to a typical home for issues such as burglary or water damage. This is because you may not be at the property as regularly.
• Premium: There are no hard and fast rules where it comes to insurance premiums. This is because these are calculated based on a number of factors. A holiday home insurance policy may also be calculated differently compared to a regular house insurance policy. Jump to our holiday home insurance premiums section to learn more.

A holiday home insurance policy is not necessarily designed around the needs of people renting out their property to guests. It can also be used by owners using their home for personal use only.

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What does holiday home insurance cover?

Holiday home insurance covers several areas of a second property. Below, we cover some of the key areas.

Holiday home buildings insurance

Your insurer can cover claims relating to the physical  makeup of the property, its fixtures and fittings. Examples of areas of the property covered by buildings insurance include:

• Structures such as walls, beams, ceilings and roof materials.
• Physical fixtures such as hobs, baths and toilets.
• Wiring and plumbing.
• Structures or features outside of the main home such as garages and outbuildings. 

The following are some important issues to consider where it relates to buildings insurance and second homes.

Rebuild cost

Insuring your second home with an accurate rebuild cost should be one of  your first priorities when purchasing buildings insurance. The rebuild cost is different to the market value. This is because it is the total cost of having to rebuild the entire property and clearing the site if required. Getting this wrong can result in your home being underinsured. Many insurers typically estimate this for you. Use a rebuild cost calculator or speak to a surveyor if you have doubts about this.

Property visitation

How often you visit your second home could have some impact on your insurance. If this is not often, insurers may place certain stipulations or apply different premiums to properties that are left empty for longer periods. 

Maintenance

Even if you don’t visit the property regularly, you will still be responsible for essential upkeep and maintenance. Insurers don’t usually cover wear and tear. Ignoring such issues could lead to claims that may not be covered by insurance if these were preventable. 

Liability cover

There are several liability issues that could potentially arise as a second home owner. For example:

• A person visiting your property slips over a path that wasn’t well maintained whilst you were away and injures themselves. 
• You accidentally cause a fire that spreads to a neighbouring home.
• A faulty roof tile falls off and hurts someone.

Liability issues can cause significant stress, hassle and cost if something goes wrong. Each insurer provides varying levels of cover for liability. It’s therefore important to check if your holiday home insurance has the right amount. Guest related liability is also important if you rent out your home. This is covered in our section on insurance for guests.

Contents insurance for holiday homes 

Contents insurance relates to the items inside of your home or within its premises. This applies to a wide variety of potential items, such as:

• Furniture, carpets and curtains.
• Electrical items such as tablets, TVs, toasters and microwaves.
• Glass, ornaments and valuables.
• Clothes and sheets.
• Kitchen items such as cutlery, pots and pans.

Below are some key issues to consider when shopping for contents insurance.

Your total sum insured 

You may not keep a large amount of contents inside of the property compared to your primary home if you don’t stay there as often. Regardless, it can still be easy to underestimate the total amount of items that should be covered. Take careful note of the market value of each item to ensure an accurate total sum insured for everything.

High value items

If you have a number of items over the insurer’s ‘single article limit’, you may be required to make the insurer aware of these. This applies even if you don’t want them to be covered. For every high value item you want insured, your provider may charge an additional premium for this. Consider reducing the number of valuable items in your second home if you don’t regularly visit and additional premiums are a concern to you.

Theft, burglary and malicious damage

Burglary and malicious damage are key reasons to consider purchasing contents insurance, especially if you only occasionally visit your second home. For claims under personal use of the property inside of the home, burglary is typically defined as loss or damage to items where forced entry occurred. This definition and how it is covered may vary with each insurer. Malicious damage is similar, but relates to where intentional damage was caused. Jump to our section on guest cover if you want to know more about theft and malicious damage cover when renting out your property.

Policy add-ons

In addition to core buildings and contents cover, insurers typically allow you to purchase a number of optional policy add-ons. Not every insurer provides the same range of optional extras. Some examples of what you could find as a policy add-on include:

• Home emergency cover: If you are not at your property all of the time, issues can get worse before you discover them. This type of add-on can cover emergency call outs where issues such as broken central heating or escape of water from drainage systems need to be attended to urgently. 
• Legal expenses: Like regular home insurance policies, this can help in legal cases such as when you suffer an injury or are involved in a contractual dispute.
• Accidental damage: When you do spend time at the property, accidents can happen even when you are careful. Some insurers charge accidental damage as an optional extra. 
• Personal belongings: Your contents may not be covered when taken out of your holiday home unless you have purchased optional cover. Consider whether you need this if you already have this type of cover for certain items such as mobile phones elsewhere. 
• Guest-related cover: Depending on your insurer, you may have to pay for additional cover for guest-related claims if renting out the property. Not all insurers provide equal cover, and some may even exclude certain features of cover for guest claims. 

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Insurance needed for paying guests

For second homes rented out to guests, you will need to make sure your insurance offers comparable levels of cover for guest-related issues as it would typical claims: 

• Theft & malicious damage: Some insurers may not cover theft or intentional damage of property inside of your home without forced entry. This by definition would exclude this cover for guests if the incident occurred as a result of letting them into your home.
• Liability cover: In some parts of the UK, a specific amount of liability insurance is legally required for rented properties to guests. How much is required by local authorities, along with the amount offered by providers, can vary across the country.
• Accidental damage: If you have a number of guests coming in and out of your property over the year then some type of accident that results in damage is probably inevitable. Accidental damage could be something minor such as damage to electrical devices, or something more serious such as damage to pipes that cause water or oil leaks.
• Legal expenses: If you get embroiled in legal action such as a court case against a guest or have an investigation brought against you by HMRC, legal fees can be expensive. 
• Replacement locks: If keys are lost during a handover, anyone in possession of them has the ability to access your property. Replacing the locks to protect yourself against this can be costly without insurance.
• Loss of income: Some insurance policies, such as the type provided by Pikl, can cover lost income from pre-existing bookings. Please note that the first 14 days following a covered incident that resulted in a claim with Pikl are excluded. 

Write down a list of issues that are important to you and check that these are covered when getting quotes.

Do I need holiday home insurance?

Insurance is not always required and it depends on circumstances such as:

• Regional requirements for rented properties: If you rent your property out to paying guests, some regions of the UK such as Scotland may require some form of applicable insurance in place in order to carry out this activity. We cover the topic of legal requirements in our guide on holiday let regulations.
• Mortgaged properties: As discussed in our holiday home rental mortgages article, mortgages typically require some form of buildings insurance in place. Similar requirements usually apply to holiday homes not rented out to guests.
• Personal requirements: Unless you can afford to pay the entire rebuild cost of your property and all of its contents, holiday home insurance of some form is often desired for personal reasons.

If you don’t have a mortgaged property or rent it out, then holiday home insurance isn’t typically required from a legal or contractual perspective. It’s important to factor in that not having cover could lead to serious financial consequences and hassle if something does go wrong, however.

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How much do holiday home insurance premiums cost?

Like many insurance policies, holiday home insurance doesn’t usually have a fixed cost and your premium will vary depending on how each insurer views your property as a risk. Below are some potential areas an insurer may weigh up when it comes to pricing your second home insurance quote.

Building construction type

Some properties may be built with materials that are either more costly to replace or more likely to result in a claim. These properties may have a higher premium than buildings made of typical materials such as brick walls and tiled roofs. So, an unusual holiday cottage may be more attractive as a nice summer retreat, but could incur higher premiums depending on what the building is made of. 

Property use

How you use the holiday home can also have a big impact on the premium. Properties that are occasionally visited and are only used for personal use may be viewed differently to homes also rented out to paying guests. 

Location

Insurers also factor in location issues such as proximity to rivers and the surface flood risk in your local area. This can affect you even if your property has no history of these issues ever occurring. There are many other examples of location specific risks that could affect your premium, including local crime rates and proximity to emergency services. So for example, a holiday home may have a nice scenic view of the ocean, but if it is close to a cliff and there is a history of coastal erosion then insurers may apply some kind of premium increase to this type of property. 

Claims

Your individual claims history may play a significant role in determining your premium. Even in the absence of any recent claims, the general number of claims made with an insurance company can also impact your individual premium. This is because any claims made affect the total amount of money put aside by that company for all future customer claims. Other general claims factors such as the cost of hiring contractors to carry out claims work can also have an impact on premiums too.

Cover

The level of cover you select will directly impact how much you pay for cover. Relevant areas include:

• Any voluntary excesses you apply to try and bring the premium down.
• The level of cover you set areas such as your property rebuild cost or total contents at.
• Any optional add-ons that you purchase. Some insurers may also charge extra for certain aspects of cover that are included as standard elsewhere.

In summary, there are a wide range of factors that affect a holiday home insurance premium, and not all of them will equally affect you. Make sure that you get the cover you require before making any decisions regarding premium.

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