Guide to insuring your overseas holiday home
There's only one problem with holiday homes - finding the right
insurance. With so many policies to choose from, so many variations
in cover, and so much legalese to get your head around, it's a bit
of a minefield. Get it right and your holiday home
insurance will cover you against almost all eventualities.
Problem sorted.
So - don't worry! Choosing the right holiday home insurance can
be as effortless as choosing where to eat out each night on
holiday. Provided you follow some very simple guidelines.
Safety first
By the time you've read to the end of this page, you'll know
precisely what you need (and just as importantly, what you don't
need) from holiday home insurance. Whether you're already insured
and looking for a better deal, or only just embarking on the
adventure of owning your holiday home, we'll help you take steps to
making it a safe, secure investment.
Like your home, your insurance policy should be something that's
unique to you. You can't rely on one-size-fits-all holiday home
insurance policies to meet your requirements. Instead, look for a
flexible insurance policy; insurance that gives the right level of
cover - and is adaptable:
-
Does your policy cover a swimming pool?
That's great - provided you've got a pool. Don't pay for cover you
don't need!
-
Will your cover extend to family and friends?
Most holiday home owners want to allow their family and friends to
enjoy their second home too - but are they covered?
-
Are paying tenants covered as standard?
So much for friends and family - what about paying guests? Will
your policy cover you and your paying guests?
The big question
So can a conventional insurance package give you the same
breadth of cover as a holiday home insurance policy? No. It's as
simple as that. Standard home insurance schemes just aren't
designed to cover periods of vacant possession. They're not
flexible enough.
you take out a conventional package and keep quiet about it
being a holiday home? No. Given that holiday homes may be left
unoccupied for long stretches, many insurers look on them as a
higher risk product.
contrast, a holiday home insurance policy or rental home
insurance policy will give you real peace of mind protecting your
property against all eventualities.
UK insurance, European cover
So how do you find your optimum insurance package? You've got
two choices. You can look for an agent or insurer in your new
neighbourhood - wherever that may be. They'll certainly be
absolutely au fait with the way the system works - but they won't
necessarily be quite so proficient in English! Provided you can get
over that stumbling block, and the fact that the paperwork probably
won't be in English either, you can probably find yourself a good
representative. But unless you're prepared to put the work in,
follow up on some recommendations, and brush up on your Bulgarian /
Spanish / Italian etc. you'll have to cross your fingers and hope
that the insurance provider you choose is the one that best meets
your needs.
Far easier then to find a UK based insurer with experience of
your second home country. But how do you find the right UK
insurer?
Again there are a few ways of going about it. You can look for
an insurer with sole specialism in your destination country, or
plump for an all rounder. While it may seem sensible to go with the
former, bear in mind that insurers with a wider range of experience
of dealing with other countries may actually be able to offer you a
more comprehensive service. Wherever you're headed, you need to
know how the legal system works there. But an insurer with
experience of the surrounding countries can help you put that
information in some sort of context. After all, it's far more
meaningful to compare the Cypriot legal system with the Greek legal
system than it is to compare it with the way things work here in
the UK. And it's those kinds of insights that can give insurers
with more wide ranging experience a bit of an edge.
Buildings, contents or both?
A buildings insurance policy is a must. As far as most lenders
are concerned, you can't get a mortgage without one. But that's a
good thing. Your buildings insurance will cover your home and
outbuildings against fire, flood and subsidence – and ensure your
investment in bricks and mortar really stands up.
But test your insurer. For example, does your holiday home
insurance cover you against a full range of perils, including fire,
storm, and flood? What about subsidence cover? It isn't available
in all European destinations - but you can get cover (with
endorsements) in the UK, Spain and Portugal. There are fewer
restrictions governing earthquake cover - but be warned that it's
not available at all in Italy or Greece. It'll come with a slightly
higher excess in Southern Cyprus, Portugal and Bulgaria - but
you'll find it's available, as standard, everywhere else.
So what about contents insurance? While a buildings insurance
package will cover you against damage to your permanent fittings
and fixtures, it won't cover your belongings. And while it's
probably safe to assume you won't be leaving many valuables behind
at the end of every holiday, your furniture will stay in-situ.
Perhaps your summer or winter wardrobes too. And then there's all
the crockery, cutlery and appliances, and so on. Suddenly, it
starts to sound like quite a lot of contents.
All of which means that a sensible level of coverage for
contents is a good adjunct to a buildings insurance policy. It'll
cover you against the things that can keep you up at night
worrying, like: escape of water, theft, malicious damage - even
accidental damage. So if you really do value peace of mind, don't
take the risk. Find yourself an insurer who'll offer these points
as standard - because not every insurer will. That way it won't
matter how far away your holiday home is, or how often it's left
unoccupied, you'll have real peace of mind - all year round. Don't
settle for anything less.
How much?
Of course, it's not just about choosing the right package of
insurance; it's about setting the right amount of cover. So how do
you decide? How much is too little, how much is too much?
The first thing to remember is this: don't insure your property
for its current market value. Instead, you need to assess how much
it would cost to rebuild the property and the outbuildings as close
to their pre-claim state. Be thorough: as well as the outbuildings
you need to include the utilities pipes, drives, patios and play
areas; even walls, gates and fences. If you're not sure, use the
current market value as your starting point - just be sure to take
into account how much it would cost to rebuild in each case.
It really is important that you make an accurate valuation, so
do make sure your insurer will index link the required sum. (Again,
not all insurers will do this.) But it means that the figure will
be updated year-on-year to reflect variations in inflation, cost of
labour etc - in other words your property will retain its value in
real terms.
As for your contents -make sure you work on a new for old basis.
What would it cost you to replace your insured items in new
condition at today's prices? Don't be tempted to undervalue this
figure - your insurer can only pay out on the basis of the
information you've given them.
Some insurers provide an invaluable English-speaking helpline to
assist with your questions. Better yet, some of them are available
round the clock - so no matter what your query, or what time it is,
or where you're calling from, you'll have help as and when you need
it. Ring round and challenge your prospective insurers to see what
they can do for you.
Accidents do happen
Let's face it - accidents do happen. It's just a shame insurers
don't always accept that. But we all know how important this level
of additional cover can be. That's why you should insist on an
insurer that includes accidental cover as standard for both their
buildings and contents policies. Check too to see if this level of
cover extends to the insured or their family. (You will only need
to make separate provision if you're planning on renting the
property out.)
Room for all
And there's another important distinction between holiday home
insurance (or overseas holiday home insurance) and regular
insurance - chances are, you'll want to invite your family and
friends to enjoy your home – maybe even paying tenants. So how do
you make allowances for all of them - and still keep your premiums
down?
More good news! You should be able to obtain overseas holiday
insurance that covers you as the insured and your immediate family
- but also extends to your friends and holiday lets. The only
exception is generally to some cases of theft - but any incidents
involving a forcible entry into – or exit from the home will be
covered.
Making a claim
By now you'll be getting the sense that, even if the worst
should happen, you can have the kind of cover in pace that will
minimise your distress and cover against any eventuality. Part of
having that reassurance is knowing that the claims process is
easily administered and handled professionally.
And if you're reviewing insurance providers, challenge them.
Here are some questions that will help you get to the bottom of
every claims policy:
-
Can your insurer talk you through the claims process to your
satisfaction?
-
Can you contact your insurer at any time, from anywhere in the
world for advice in the event of making a claim?
-
What is their average timescale for settlement?
-
Is there anything in the small print that might come back to
haunt you?
-
Make sure everything is crystal clear – if it isn't, don't be
afraid to say you don't understand.
-
Will your insurer be handling your claim themselves?
-
That last question's a biggie! And it's not always easy to
assess. Just because your search for 'Spanish property insurance',
or 'French property insurance' brings up insurers with expertise in
those areas - it doesn't in any way guarantee that they'll have the
authority to oversee claims proceedings. And that can seriously
slow down the claim and, inevitably, the settlement.
We've talked a lot about reassurance. And, at the end of the
day, your UK or overseas holiday home insurance should be
completely reassuring. The best policies are the ones that address
your needs flexibly. That means giving you the benefit of 24/7
service. It doesn't matter where your holiday home is, you need to
be able to speak to a UK advisor, on your terms - and at a time of
day to suit you.
And for even more reassurance, make sure that your insurer is
actually going to be dealing with your claims themselves - not
devolving responsibility to a national insurer. Check first to see
how far their expertise really extends.
All the extras
And one last thing. Think back to buying that holiday home. It
wasn't just the location and the amenities and the practicalities
that appealed was it? There was something else - something extra -
a look, a feeling or a feature that helped convince you it was the
right investment...
Actually a good insurance policy should be like that too. You
look for the essentials - the breadth of cover, the ease of the
claim process and so on - but what about the little extras that
make such a big difference. These are the sorts of things that set
one holiday home insurance scheme over and above another. Like the
cover for the loss of hiring charges up to 20% in the event of any
property damage sustained under the Buildings section. Like
automatic extension of cover to friends and tenants. And how about
this...
How would you like to have an overseas assistance scheme built
into your overseas holiday home insurance package? Overseas
assistance schemes are gaining in popularity - but are still the
preserve of the most customer-focused insurers; they give you, or
anybody renting your property, free 24-hour access to a domestic
helpline and emergency interpreting service. Whatever happens, you
can call on them to help you communicate with the relevant
authorities and get it sorted out as quickly as possible.
Hopefully by now, the thought of insuring your holiday home or
even re-insuring it won't be quite so daunting. And the sooner
you're sorted, the sooner you can get on with enjoying your second
home and your holidays - secure in the knowledge that you're
covered.
Find out more information aobut our Holiday home
insurance policy.
