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Pikl Insurance for holiday lets: What we cover
What is holiday let insurance?
What does insurance for holiday lets cover?
What insurance cover do I need for a holiday let?
Do I need holiday letting insurance for my property?
How much does holiday let insurance typically cost?
How much holiday let insurance cover do I need?
What types of properties does holiday let insurance cover?
Won’t platforms like Airbnb cover me?
Pikl Insurance for holiday lets: What we cover
With Pikl, you can get buildings and contents cover for both personal use and guest-related claims. Below are some examples of standard and guest-related cover that we provide:
Public liability for guest-related issues
Fire, storm and flood damage
Personal liability
Home emergency cover
Theft, malicious & accidental damage
Legal expenses cover
Replacement locks
Subsidence, heave & landslip
Escape of water and oil
Property owner liability
Up to 365 days of guest-related cover if needed
UK based call centre
What is holiday let insurance?
Holiday let insurance covers second homes rented out to paying guests. With booking and travel sites rising in prominence, renting out a holiday home to guests for additional income is more widespread. Holiday let insurance differs from regular home insurance in that it covers additional homes specifically used for this purpose. Standard home insurance by contrast typically covers residents living in it. Holiday let insurance therefore covers the specific risks that come with renting out a second home.
What does insurance for holiday lets cover?
Holiday letting insurance typically contains two components of cover. Buildings insurance protects the physical structure of your property. Contents insurance covers the items inside of it. Whilst some of these aspects of cover are core features that come built in with your holiday let insurance, there is usually a range of optional add-ons you can buy as well. Let’s break down the main aspects of cover that holiday let insurance typically provides:
Buildings insurance
Buildings insurance for holiday lets can typically cover any part of the physical makeup of the property, including:
- Built-in fixtures such as baths, showers, sinks, cupboards, and ceramic hobs.
- Pipework, drains, radiators and wiring.
- Roofs, ceilings, floors, walls, and windows.
- Guest outbuildings, hot tubs, swimming pools, etc.
If you have a flat, buildings insurance does not cover the external structure of a flat or apartment. This would usually be picked up by the underlying buildings insurance provided typically by the freeholder of the building. The exception to this is Scotland, where there is a requirement for the flat owner to insure their section of the building.
Cover considerations to note where it relates to buildings insurance include:
- Construction type: Typical construction types such as brick walls and tiled roofs may be easier to cover than non-standard ones. Several types of holiday rentals from log cabins to chalets can sometimes be classed as ‘non-standard’ in this regard. If the property is a listed building then this may also affect the ability to get a quote through standard cover.
- Property changes: Extending the property or reconfiguring the interior to make it more attractive to guests could result in material changes that affect your insurance.
- Wear and tear: With guests coming in and out of your property, parts of your property will naturally be subject to wear and tear over time, which isn’t typically covered by most insurers.
- Legal checks: If you are renting your property, you’ll be required to carry out annual checks each year such as boiler services and electricity certification. Your buildings insurer will also expect you to carry out these kinds of checks in order to minimise any risks of a claim occurring.
Contents insurance
Contents can easily be undervalued but often add up in cost as they cover a wide variety of potential areas. Examples of items typically covered under contents include:
- Electrical items such as televisions, toasters, kettles, etc.
- Valuables, watches, and jewellery.
- Gadgets, phones, computers, and tablets.
- Carpets and rugs.
- Furniture, sofas and beds.
When purchasing contents insurance, it’s also important to note the value of each item in addition to the total sum of contents. Insurers typically set a single article limit, which is a ceiling on the total value you can claim for an individual item. If an item is worth more than this, it usually needs to be listed individually on the policy to be covered. Other points to consider include:
- High value items: Even if you don’t want to insure an individual item with a high value through your holiday let policy, you’ll still need to notify your insurer. Some insurance policies may not be willing to offer cover at all if an item’s value exceeds the insurer’s allowable policy limit.
- Cash: Holiday let insurers do not typically cover cash. Keep cash off the premises, if possible.
- Minor claims: Some contents claims can be minor, so check the level of excess on your policy. Insurers will not cover claims below the excess. In addition, consider whether it is worth making a claim for minor incidents, as this can affect future premiums.
Optional extras
Insurers offer differing levels of standard cover and often sell additional add-ons, which differ with each provider. Cover add-ons that may be sold as optional extras include:
- Accidental damage: Protects against items unintentionally damaged by residents at the property.
- Home emergency: Covers emergency call-outs that require immediate attention.
- Legal expenses cover: This add-on covers any potential costs associated with taking someone to court.
- Personal belongings: Most insurers don’t allow you to make claims for items away from home unless you take out personal belongings cover.
- Bicycle cover: Most insurers provide an element of cover for bikes as standard. Typically once you reach a certain threshold of value, it will only be covered if specified. However, this isn’t always under personal belongings cover and each insurer may do something different.
Insurance for guests
The amount of guest-related cover you can get varies with each insurer. Guest-related issues that holiday let insurance covers may include the following:
- Accidental & malicious damage.
- Theft or attempted theft.
- Public liability cover (e.g. guest injuries)
- Legal expenses.
- Loss of income.
- Escape of water, oil, and fire damage.
- Pest infestation.
- Replacement locks.
Due to the nature of holiday letting activity, it’s this type of cover that you may want to pay close attention to when shopping around for insurance. Areas such as theft & malicious damage or public liability insurance are not always insured where it relates to guests, or may have varying levels of cover when comparing between insurers. Below, we discuss some of the key areas you may want to consider when getting a quote.
What insurance cover do I need for a holiday let?
The needs of each individual may vary. Whilst some cover features such as insurance for burglaries or floods typically come as standard in many property insurance policies, there are some key areas that are specific to holiday lets. Below are some areas you may wish to consider.
Property rebuild cost
The cost of rebuilding an entire property is often very expensive, which makes building insurance an essential purchase for many. The rebuild cost will determine how much buildings insurance cover you require. Use a rebuild cost calculator or contact a property surveyor if you aren’t sure.
Public liability insurance for holiday lets
Regions of the UK such as Scotland now require public liability insurance as part of its requirements for obtaining a short-let licence, which is mandatory if you’re renting out a property to short-term guests. Outside of legal requirements, public liability insurance protects you against significant hassle and costs. A large liability claim due to third-party property damage or guest injury can result in £10,000s in damages against you. Here are some examples of where someone could make a claim against you:
- A guest falls over a trip hazard and injures themselves.
- The neighbour’s house burns down after one of your guests sets fire to your property.
- An overseas guest electrocutes themselves on faulty wiring and is repatriated to their home country.
Be sure to check your property for any potential hazards that could cause injuries or result in property damage. If you’re found to be legally liable for anything, having the right cover in place can provide you with peace of mind knowing that you’re protected.
Accidental damage
Accidental damage can be a typical incident involving guests, and the most common types of accidental claims are minor. Here are some examples:
- A broken television.
- Liquid spilt on a carpet.
- Broken windows.
It’s these types of minor incidents that are more likely to occur during a guest’s stay.
Theft and malicious damage
Insurers typically cover theft or malicious damage inside a home in scenarios where there has been forced entry. By contrast, guest-related theft or malicious damage may be excluded by other holiday let insurers, as cover varies depending on who you are with. Examples of the types of guest-related claims where this would be relevant include:
- Items stolen from your home.
- Parties where the guests trash your home.
- Criminal damage.
Not only can these types of claims be very stressful, they can also be very costly. The chances of these types of claims occurring are higher when you let guests into your home, making theft and malicious damage an important aspect of cover to consider.
Loss of income
Managing a holiday let business takes up considerable time and effort. Losing out on potential income can also prove very costly and stressful if you have to cancel bookings as a result of making a claim. Depending on the type of damage being repaired, it may take some time to put your home back into action. Consider purchasing insurance that also provides loss of income cover for pre-existing bookings following a buildings or contents claim against the policy, such as the kind that Pikl provides. Please note that the first 14 days following an incident that resulted in a claim with Pikl are excluded.
Legal expenses cover
Court cases and legal issues can arise as a result of being a homeowner. Legal expenses can cover the costs of having to make these types of claims. Some examples of where legal expenses cover might be used include:
- A contractual dispute.
- Making a liability claim against another person or organisation.
- A consumer protection claim.
- Eviction.
- Covering the cost of an accountant if being investigated by HMRC.
Consider whether you could afford the cost of legal fees yourself. Many holiday home owners find that having legal expenses covered by their policy gives them peace of mind for this very reason.
Home emergency
Fixing urgent repairs can be stressful. It is often very expensive too when you need it to be done on short notice. The number of potential issues where this could occur are potentially endless, but here are some of the most common examples:
- Boiler faults.
- Burst pipes.
- Security breaches such as a broken window.
- Leaky roofs.
- Electrical failure.
- Heating issues.
Proper budgeting and property maintenance can reduce the likelihood of such issues occurring or make them less disruptive. Unfortunately, they can also arise anyway as an inevitable result of owning a home. If you would like to protect yourself against issues like this, purchasing home emergency cover may be a wise choice.
Pest infestation
Pest infestation at your property can cause serious disruption to both your business and guests. Not only is pest infestation a health hazard, it can sometimes take a long time to fix. Check that pest infestation is included in your insurance. If not, you may:
- Have to pay for the cost of fixing the issue yourself.
- Incur further damages if more invasive solutions such as fumigation were required, which result in damage to your contents.
- Incur further disruption to your business and guests.
Loss of keys
Theft or loss of keys may seem like a minor issue, but it can potentially be quite costly and cause significant adverse consequences for your property if not dealt with. Not addressing this kind of issue could result in:
- People accessing your property without your permission.
- Loss or damages if someone stole or broke items in your home.
- Your insurer not paying out if you were negligent.
Fixing the issue out of your own pocket can be costly, as you’ll need to replace the locks too. Check that this is included in your holiday let insurance cover when getting a holiday let insurance quote.
Escape of water or oil
Claims of these types can cause significant damage and disruption to your property, especially if the source of any leak is difficult to identify. Cover for this can protect you against:
- Buildings damage caused by escape of water or heating oil from water tanks, equipment or pipework.
- Contents damage that occurred as a result of this.
- Damage caused as a result of identifying the leak.
Escape of water and oil is usually covered for specific incidents, so check your policy booklet if you are not sure.
Do I need holiday letting insurance for my property?
Several parts of the UK now require a short-let licence in order to operate if you have paying guests, as outlined in our article on legal requirements for holiday home owners. Areas such as Scotland now require some form of insurance in place as part of this. England may follow shortly.
Beyond any regional requirements, there are other considerations too. Mortgage providers also typically require some form of insurance in place, as discussed in our article on holiday let mortgages. Insurance also protects you against serious out-of-pocket expenses that you may otherwise struggle to pay if something goes wrong. Allowing paying guests into your home also brings up potential issues that represent a different kind of risk. These unique issues make insurance for holiday lets an important purchase to consider if you want to protect your property and your income.
How much does holiday let insurance typically cost?
Holiday let insurance is usually more expensive than regular home insurance as it covers different risks, but it also depends on your situation and the insurer. Not being present at the home as often could increase the chances of a claim occurring. In addition, having guests at the property is not the same as having residents living there. However, each home and risk is also different. Many of the factors that affect a standard home insurance policy are also relevant in the case of holiday lets, such as:
- Your excess.
- The level of cover purchased (including optional add-ons).
- Your no-claims bonus.
- Property type.
- Location.
Make sure you purchase the cover you require to keep yourself protected but don’t over insure yourself either. Doing so could mean you pay more than you need to. Paying everything up front is usually cheaper, but consider whether you can afford to do this. There is no one size fits all approach when it comes to insurance premiums, so do what works for you. For a deeper dive on insurance costs and the general costs associated with running a holiday let, have a look at our holiday let costs guide.
How much holiday let insurance cover do I need?
The amount of holiday let cover required may vary according to:
- Your cover needs.
- The property rebuild cost.
- Your total contents sum insured.
- Additional cover features selected, such as optional extras.
- The amount of cover your insurer is able to provide.
If you are insuring a flat that’s only occasionally rented out, for example, then extensive guest-related cover may not be required and a simple contents only policy with some limited guest cover may suffice. By contrast, an owner with a large holiday let that’s rented all year round may require more extensive cover. To make sure that you get the right level of insurance cover, you should:
- Speak to an insurance expert such as a broker if you are still not sure as to how much cover you need.
- Think about your own circumstances.
- Assess whether any existing cover that you have is suitable for your needs.
- Compare like for like cover when shopping for a quote.
- Remember that each insurer provides different levels of cover.
What types of properties does holiday let insurance cover?
Holiday let insurance typically covers properties made of common building construction materials such as brick and tile or stone and slate. The types of buildings covered can vary from flats to whole properties, holiday lodges, and chalets. Whilst standard properties are easier to insure, a specialist such can also cover less common property and construction types.
Won’t platforms like Airbnb cover me?
Airbnb provides some protection, but this is limited and isn’t a replacement for having proper insurance in place. In addition, most platforms provide no protection at all. If you are an owner listing your property on multiple platforms, having comprehensive insurance in place can give you peace of mind that you have the same cover regardless of where you list your property.
Head over to our Airbnb insurance guide to find out more on this topic.
How can I minimise risk in my holiday let?
Here are some key points to consider that can both reduce risk and make any potential insurance claims go more smoothly:
- Be cautious: Speak to your guests if you have any doubts about a booking. In addition, one night bookings with a large number of guests may be more likely to attract parties that cause insurance damage. Trust your instincts, but be respectful to your guests too.
- Have a robust cleaning process: As we discuss in our holiday let cleaning guide, check off an itinerary of key areas as you clean each room. This allows you to spot damage quickly before things get worse and other guests arrive.
- Think about guest check-ins: Our article on the check in process discusses the multiple potential ways you can allow your guest to check in, and each one has its own security considerations. If you are using a key safe, for example, using a police approved one may be viewed more favourably by insurers. Likewise, use someone you trust if employing someone else to do key handovers in person.
- Make yourself available for emergencies: If something goes wrong, not having someone available for a guest to contact in the event of an emergency could lead to a situation getting worse. In the case of property damage, insurers may not look favourably on such situations if you did not take steps that could have allowed you to mitigate damages as soon as possible.
Who are Pikl Insurance?
Founded in 2016, Pikl is an insurance company that specialises in cover for holiday lets. We are an FCA registered company (FCA number: 773457) and have a team with a wealth of industry experience. Customers that choose Pikl can:
- Compare insurance quotes through our panel of leading UK insurers with household names such as Allianz, Prestige, AXA and Arkel Insurance.
- Get cover tailored specifically for holiday letting activity.
- Speak to experts in a UK based call centre.
Get in touch with one of our operatives or click on the ‘Get a quote’ button to get cover today.
Our guides to holiday letting
Whether you’ve just started out or are an experienced holiday let owner, check out our selection of in-depth holiday home guides and tips to maximise your income and protect your property. You can find the full index here.
The holiday let changeover cleaning checklist guide
We cover the key areas to consider when looking at a holiday let changeover cleaning checklist.
The biggest costs of running a holiday let
Discover the biggest costs of running a holiday let and the hidden ones that may surprise you too.
UK Holiday let profit calculator
Use our holiday let profit calculator to find out how much you could earn as a holiday let owner.
How to start a holiday let business
Check out our in-depth tips on renting out a holiday home. We discuss how to run a successful holiday let business.
An extensive overview of key holiday let regulations for owners
Find out how various UK holiday let rules and regulations impact your business. Read more in this guide from Pikl.
Can you get a mortgage on a holiday home rental?
Discover more about holiday let mortgages and whether you can get a mortgage on a holiday home.
Furnished Holiday Let Tax Rules: A Guide to Tax on Holiday Lets
We discuss furnished holiday let tax rules and more in this comprehensive guide to tax on holiday lets.
The Best Place to Advertise Your Holiday Let
Looking to find the best place to advertise your holiday let? We discuss the best way to market your property.
