Finding building and contents insurance for a holiday home can leave you needing a good holiday. Most UK insurers will not provide stand-alone policies for holiday homes. Overseas properties and those let out to tenants for part of the year are especially difficult. The best option in many cases is to turn to the insurer that covers your main residence. Failing that, specialist brokers and insurers may be able to help.
Ray Boulger, technical manager at independent financial advisers John Charcol, says: "In most cases, it is advisable for someone to get insurance for their holiday home with the same company that provides insurance for their main residence. Insurers see bigger risks with holiday homes because they are often left unoccupied for long periods."
Richard Lowe, general insurance co-ordinator at independent financial adviser Savills Private Finance, adds: "Premiums for stand-alone policies for holiday homes are likely to be 20 to 30 per cent higher than premiums for main residences because insurers perceive greater risks. Policies that cover the holiday home and the main home jointly are cheaper because the insurer also has the better part of the risk, from the main residence."
Boulger adds: "For most people, the most important thing is building insurance because they do not have expensive contents in their holiday homes. If you want contents insurance for the holiday home, it would be a good idea to install an alarm - that could reduce the cost by up to 10 per cent." It is vital that you look at the small print for holiday-home insurance, because it usually contains more restrictions than main residence policies.
Lowe says: "Some policies for holiday homes have a specific exclusion for burst pipes between September and March. The central heating must be left on permanently between these months or the heating must be turned off and the pipes drained."
"If the property is rented out, there could be a restriction for theft by tenants. Some policies only cover for violent or forcible entrance or exit by a burglar. Many policies also exclude accidental damage by tenants. It is very rare to find insurance that covers burst pipes, general theft and accidental damage by tenants." Holi day-home policies may not cover the property if it is unoccupied for more than 30 consecutive days. Insurers may insist on someone visiting the property every week and on special locks being installed.
However, insurance broker Schofields will cover for most eventualities. It has a range of stand-alone holiday home insurances, Schofields Holiday Homes Schemes, underwritten through Lloyd's of London. David Gaskell, its administration manager, says: "Most policies exclude for theft, accidental damage or burst pipes but ours do not."
Schofields can also arrange policies for holiday homes in France, Spain, Italy and the Republic of Ireland. Gaskell said premiums for holiday homes abroad can be more than a quarter higher than in the UK because there are often additional types of taxation. For example, in France taxes for natural catastrophes, fire, other perils, and victims of terrorism have to be added. Hiscox, a specialist high net-worth insurer, will cover holiday homes in the UK and continental Europe, although it prefers to cover the main residence as well as the holiday home. Its policies are only available through insurance brokers.
Shane Colvin, an underwriter at Hiscox, says: "The advantage of coming to us is that we provide worldwide all-risks cover for the main residence's contents. This means that if you have a piece of furniture you really like you can take it to the holiday home and it will be covered while you stay there. However, if you want to leave it there permanently, you would have to take a separate holiday-home policy."
Colvin warns that those with holiday homes abroad have to be particularly careful about the small print. For example, Hiscox's policies do not usually cover for earthquakes, subsidence or accidental damage (although this can be added). Insurance underwriters Towergate Holiday Homes will provide stand-alone policies for holiday homes virtually anywhere in the world, although its policies are only available through insurance brokers. Colin Birch, its managing director, says: "We can provide cover in any territory that allows us to do it. We would not be able to do it in Afghanistan, but I don't think many people have holiday homes there."
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