Is holiday home insurance necessary?
Monday, 08 September 2008 12:00
Buying a holiday home, whether as an investment or somewhere to escape to, is a dream for many Brits. But many second-homers may find they are pushed into taking out insurance by their broker, or end up not taking any insurance out at all.
According to insurer Zurich, one in ten holiday homeowners have no contents insurance, and another one in ten do not know whether their insurance is adequate.
When buying your holiday home, where can you find a good deal? And what exactly should you be looking for?
Nick Brabham, head of Zurich Private Clients, warns holiday homeowners that just because they view somewhere as a second property, it does not mean it should come second best in terms of security measures or insurance protection.
"There has been a steady rise in the number of customers with second homes, either in the UK or abroad.
"While we're using them, we often let our guard down as we relax and unwind, but we need to ensure that we don't compromise on security or cover, leaving our property vulnerable and thousands of pounds of our possessions at risk," he explains.
Although you may think your property is most at risk when it is unoccupied, burglars are twice as likely to break in while you are visting than away, Saga Holiday Home Insurance has found.
A fifth of claims (18 per cent) on vacation properties are theft-related and almost three quarters (71 per cent) of these claims occur when people are actually using their holiday home rather than when it is left unoccupied for weeks at a time.
Andrew Goodsell, chief executive of Saga, explains: "Many people mistakenly believe that their holiday homes are more at risk when they're unoccupied, however our research clearly shows that this is not the case.
"The majority of burglaries are opportunistic thieves that rely on us being in the holiday mindset, a door left unlocked whilst we go for a swim is a perfect opportunity for them to strike, but could so easily be avoided!"
Many insurers will not pay out unless there is evidence of a break-in, so either find a policy that will pay out in the case of a door left unlocked, or be very careful when you leave the house.
Laurent Schonbach, head of overseas at insurer Hiscox, says your home insurance will not protect your second home and neither will travel insurance, so a specific policy is important.
And if you are considering taking out insurance with a local insurer, you need to take into account differences in overseas policies.
"For example, in France, you do not get a policy schedule. You just get an invoice. That is because in the UK, the market is more competitive," Mr Schonbach explains.
Mr Schonbach said one client who originally took out insurance with a local broker was in for a shock when he tried to claim for a damaged TV aerial and missing roof tiles after a storm.
The client told Hiscox in a letter: "The company refused the claim either for reparations to the roof or for the consequential water damage - because the assessor perceived that the average wind speed was less than the 120kph above which it was required to be before any claim would be considered. They would not consider the wind did at any time 'gust'!"
However, accidental damage and theft are not the only things that a homeowner has to worry about.
If you have friends and family to stay and someone gets injured, you could be liable if they decide to sue. This would also be the case if you decide to let the home out.
Mr Schonbach suggests you find a policy that matches your lifestyle most closely. For example, if you are going to leave your property unoccupied for a long period of time, check there are no conditions that could catch you out.
In addition, many policies will only pay out for theft if there is evidence of a break-in. But if you have accidentally left a window or door unlocked, you will not be able to claim, even if you were there at the time.
And do not assume that all countries' policies will be similar - in Italy, for example, you are only covered for half of the cost of any damage in the event of an earthquake.
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