Insuring your second home for holiday letting

Conservatory with a view at Sunnycliff, Nr Tintagel

Letting your holiday home to paying guests has many benefits such as covering your running costs whilst also supporting the local community by increasing tourism. As with any venture there are also risks – such as not having the right insurance cover to protect your valuable investment. Holiday home insurance specialist, Boshers Ltd of www.boshers.co.uk offer ten aspects to consider when insuring your second home for holiday letting. 

  1. Take advice – your holiday home is likely to be one of your most valuable assets. Our top tip is take advice from an insurance broker who specialises in the furnished holiday lettings market. A specialist will understand your needs, the risks involved in holiday letting and will have negotiated a package of covers to protect your financial interest in the property.
  2. Legislation – you may not think of furnished holiday letting as a business, however by allowing paying guests stay in your property that is what it becomes. You have a duty of care to your guests, visitors and employees to ensure that you abide by all relevant legislation which covers areas such as health and safety, planning, building regulations, fire safety, gas safety and discrimination. Your holiday home letting agent will provide guidance on how to comply.
  3. Disclosure – be open and honest with your insurer by providing complete and accurate information to your insurers. Failure to disclose or giving false information in order to obtain insurance may deem your contract invalid and therefore be costly in the event of a loss.
  4. Policy conditions – a specialist broker will make you aware of the benefits as well as point out clearly any conditions or warranties that may apply and the consequences of failing to comply. Excesses should also be considered.
  5. Employers Liability – cover to indemnify you against your legal liability to pay damages and legal costs arising out of bodily injury to an employed person such as a housekeeper, cleaner or gardener employed in connection with letting your holiday home.
  6. Public and Products Liability – cover to indemnify you against your legal liability to pay damages arising out of accidental injury to guests and other visitors to your holiday home and accidental damage to a third parties property caused in connection with letting your holiday home.
  7. Buildings and Contents – as well as covering you for standard perils such as fire, flood and theft, you may want to consider cover for accidental damage. It is also worth checking that the cover does not have any unreasonable exclusions such as excluding accidental damage when occupied by paying guests or theft exclusions unless by forceful and violent entry to the property.
  8. Underinsurance – saving money by under-stating your sums insured is a false economy. In the event of a large loss resulting in a claim a loss adjuster may be appointed. One of their first tasks will be to ensure that your sums insured are correct. In the event of underinsurance a deduction for `average’ will be made when settling claims. This means the amount that is paid out for any claim will be reduced in proportion to the degree of underinsurance, leaving you to fund the remaining.
  9. Loss of rental income – cover for loss of your rental income should your holiday home be destroyed or damaged by an insured event which interrupts its availability for letting. Ensure that the cover provided is sufficient to cover the typical annual revenue generated. In the event of a large loss, rebuilding can often take up to two years so ensure that the indemnity period is sufficient. Be careful of policies that only offer cover for loss of income as a result of confirmed pre-bookings.
  10. Loss of keys and the use of key safes – cover for the reasonable cost necessarily incurred in replacing door or window locks at your holiday let including locks to safes and alarms following theft or loss of keys. Key safes can provide a convenient way of managing access for guests, ensure that your holiday home insurance provider does not exclude there use.

Additional guidance, advice and quotes are available from the Boshers holiday home insurance team on 01237 429444. For more information visit www.boshers.co.uk