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Insurance: Holiday homes are most at risk whilst unoccupied - are you insured?

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Insurance: Holiday homes are most at risk whilst unoccupied - are you insured?

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Written by  Laurinda Seabra
Monday, 24 July 2017 00:23

Is there a clause in the policy that excludes cover if the holiday home is uninhabited for more than 30 consecutive days? What about heating warranties?   Some insurers insist that the water system is drained during periods of un-occupancy, or that the property is heated constantly to a certain minimum temperature.

Would you be insured if your electric heating failed due to a power cut (or you forgot to drain the water) and a burst pipe occurred?

Ensure you are protected and choose a policy that doesn't include complex un-occupancy terms.   

Security requirements: will having the wrong locks invalidate cover?

What are the second home insurers security requirements? Do you have to inspect the property regularly or install specific locks on doors and windows? You could even find the insurance is invalidated by having the wrong type of locks on the doors or by leaving windows unlocked when you go out.  

Theft cover

Holidays homes are attractive to burglars as they usually contain an array of electrical items and gadgets, plus it is relatively easy to identify when they are occupied or vacant. Check that theft by non-forced entry is covered - for example a burglar entering through an unlocked window or using a key. Many policies require proof of forced entry for a theft claim to be valid.  When holiday letting to virtual strangers it's also important to ensure theft by guests is covered.  

Loss of rent and alternative accommodation cover for holiday letting

First off, if you plan to commercially let your holiday home it is important that you choose a policy that allows letting.   Some insurers only cover use by friends and family as letting can increase the risk of a claim.  One of the biggest worries when holiday letting is if your property becoming uninhabitable as a result of the unexpected - like a burst pipe, fire or floods. During the peak holiday season such a disaster could mean thousands of pounds in lost income and a huge inconvenience for many months.  Choose a policy that will allow you to claim for the loss of rental income and pay for temporary accommodation for you or your holiday guests.  

Legal advice

 It is also a good idea to choose a policy that includes a legal advice helpline. This will come in useful, if for example you have a dispute with one of the tenants occupying your property, or with a letting agency with whom you may have entered in to a letting agreement.  

Making a claim

The acid test of any insurance policy lies in the claims service. At this point you will discover the value of your policy. Does the insurer have the authority to manage and make decisions in-house or is the claims handling process out-sourced to a company outside of Portugal?. How quickly will you receive settlement? Pay attention to the small print in relation to storm and flood cover.   Some insurers require minimum wind speeds or rainfall levels to be recorded in order for a claim to be valid.  

Changing to winter long term lets

If your holiday bookings are seasonal, you may wish to let your second home on a six month lease during winter months rather than leave it standing empty. Make sure your insurance allows you to do so easily.  

Administration charges

What other charges are you likely to incur should you want to amend your policy e.g. change a name or increase the sum insured.   If there is an admin charge for doing so, then this could prove an additional expense on top of the premium.  Take steps to reduce claims - but as a priority make sure you are covered.  As you can see from the above, insurance doesn't cover every eventuality so it's important that you take reasonable steps to prevent claims.

General tips

  • Leave a key with trusted neighbours who can check your property frequently to reduce the risk of theft, damage and alert you of any problems.  
  • Leaving the heating on (thermostatically controlled) can minimise potential danger and water damage.
  • Always inform your second home insurer of any alterations you make to your property that could alter the sum insured or its risk.
  • Remember, just because your holiday home is out of sight, it really mustn't be out of mind.  
  • Before you buy your home insurance, ask for a copy of the full policy wording.
  • Check for any exclusions or gaps in cover and understand your obligations - some of which may be unreasonable.

Hopefully this will prevent any unpleasant surprises in the event of a claim.  Consider all the points above when insuring a second home and you should be adequately protected. Choose a policy based on the value of cover - not price.

Next steps: Compare holiday home insurance - identify the risks and small print that can leave you with inadequate cover or get a quote.  

 

Disclaimer: this information should be used as a guide only and should not solely be relied upon. We advise that you read any insurance policy terms, conditions and exclusions thoroughly, seeking professional advice if necessary to fully understand the extent of cover provided.

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