Is your second home in the sun protected?

It’s been a while since we have been able to go on holiday, so for many with a country retreat or holiday home in the sun, chances are you’ll be hoping to visit as soon as travel restrictions allow and you’re not alone. Second homes are becoming more and more popular, in 2019 research identified that 5.5 million people in the UK have more than one property.¹ Whether your second home is overseas or in the UK, it’s important to check whether the holiday home insurance or second home insurance you have is adequate. 

Overseas holiday homes in Spain, France, Portugal, Greece and Italy are the current most popular destinations for Brits purchasing a home overseas.² In Spain, for example, Britons continue to make up the largest group of foreign nationals buying Spanish properties, representing 14% of this total.³ For those with second homes overseas, it’s important to check the level of overseas holiday home insurance in place, especially with current restrictions on travel and limited ability to enjoy properties abroad, it might be that policies need to be amended or unoccupied home insurance considered.  

Aside from global pandemics, natural disasters are another important consideration for ensuring your holiday home insurance provides the level of protection you may need. In the UK alone, 11% of home insurance claims are weather related.⁴ However, it’s not just pandemics and natural disasters which can cause issues, unfortunately sometimes things can go wrong and without adequate second home insurance, the cost of rectifying these problems can mount up. In the UK, £1.8million is paid out every day for ‘escape of water’ claims.⁵ So why wouldn’t you make sure your second home is protected? 

1. Check your sums insured
   It is important to regularly check the replacement costs for your contents to avoid being underinsured in the event of a claim. Most specialist insurers provide appraisal services for UK residences, however they won’t always provide this service for holiday homes abroad. Not all insurers will automatically increase your sums insured in line with inflation, so be sure to regularly check your sums insured is suitable. It is also worth considering whether you want to state your sums insured in the currency of where your holiday home is located. This may help you avoid any underinsurance due to exchange rate fluctuations. It is possible to have a policy from a UK based broker or insurer but with the sums insured detailed in euros.
   
   
2. Estimate when your holiday home will be occupied
   Most insurers expect a lower occupancy level for holiday homes, however if you’re likely to leave the property unoccupied for over 30 days, speak to your broker or insurer as additional conditions may apply. This may be particularly applicable at the moment due to travel restrictions. If your property has been left unoccupied due to the COVID-19 pandemic, it is worth checking with your holiday home insurance provider if you are still covered or if you need unoccupied home insurance. 
   
   
3. Advise if you’re letting out your holiday home
   Many holiday home owners take advantage of the earning potential of their property by letting it out for extended periods of time. This can be very beneficial but could impact on your insurance premium or cover. So make sure your broker or insurer is aware if you let out, or plan to let out, your holiday home. But be aware that not all insurers are receptive to sub-letting activity.
   
   
4. Take steps to manage property risks
   When arranging your second home insurance your property will be assessed on its individual merits. The insurer will look at the steps you’ve taken to manage your property while it’s unoccupied, and may be able to offer better terms where you have reduced or eliminated a risk that could lead to a claim. For example, if you have arranged for regular inspections of the property to be carried out, or if you have security measures such as fire and intruder alarms or water leak detection devices.
   
   
5. Disclose all relevant information
   It is vital that all the facts about your holiday home are given to your broker or insurer when your policy is taken out. Failure to tell them about a situation or significant detail could cause difficulties if you ever need to make a claim. This includes letting your insurance broker or provider know about any local issues that may affect your property, such as subsidence or risk of earthquake, fire or flood.
   
   
6. Consider language barriers and local laws
   If your second home is abroad and you aren’t fluent in the language, approaching a local insurer of the country where the home is situated could be problematic due to language barriers. You may not be aware of the local laws and practices of the legal system in a foreign country, and interpreting a policy wording which is not in your native language is no easy feat. It can also make things more difficult should you ever need to make a claim.

Whether it’s a cottage in the Cotswolds or a chateau in Cap Ferrat you will want to ensure it is adequately insured to allow you and your family to continue to enjoy it for many years to come.
 

<sup><sub>Sources:
1. resolutionfoundation.org/Game-of-Homes.pdf
2. aplaceinthesun.com/top-10-best-places-to-buy-a-property-abroad-in-2019
3. howtobuyinspain.com/foreigners-buying-property-in-spain
4. statista.com/uk-domestic-claims-property-insurance
5. finder.com/home-insurance-statistics</sub></sup>