Holiday Home Insurance

By: EconomyWatch   Date: 5 September 2009

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Owning a holiday home comes with substantially higher risk than that associated with a regular home. This is because the property used as a vocation home:

  • Remains empty for a long time period

  • Can be let out for the period you would not be using it

 

Both these aspects are not covered in the standard home insurance policy, necessitating a holiday house insurance policy.

 

Holiday home insurance is an imperative measure to cover damages to your property. Conventional home insurance is not applicable for a holiday home because it largely remains unoccupied. Thus, buying a specialist holiday home insurance policy is crucial for the owner to cover against damage caused by fire, theft or natural disasters.

 

 

Holiday Home Insurance: Types of Cover

Building Insurance: If you are considering mortgage for buying a holiday home, most lenders insist on having at least building insurance. This type of insurance covers the basic structure, garage, swimming pool, gates and fences. Building insurance will provide cover against repair or rebuilding of the structure, removal of debris and associated labor costs.

To estimate the cost of coverage, one has to calculate the rebuild value for the property. The value as calculated by an individual will be checked by the surveyor of the insurance company.

Contents Insurance: This insurance provides cover for all the valuable items in the house. It includes the cost of furniture, electronic goods and interior designing. However, it does not include personal valuables, such as jewelry, since the holiday home is usually left unoccupied. Choose a holiday home insurance policy that covers damage to the contents for accidents as well as natural disasters.

 

 

Legal Liability Insurance: It is essential that holiday home insurance covers legal liabilities against damage to another person caused by the property. If you are planning to rent your holiday home, then this form of insurance becomes even more important. One can also include the cost of legal expenses that may arise due to property disputes.

Loss of Rent Insurance: If you wish to buy a loss of rent cover, seek holiday home insurance that allows renting of the property. It will provide indemnity against those periods when your home is left unoccupied.

Holiday Home Insurance: Making a Claim

It is important to read the policy agreement properly to understand the coverage, exclusions and terms and conditions for filing a claim. As the owner does not reside in the holiday home permanently, the claim filing procedure can be really complicated. So it is essential to get knowledge about the claim settlement process of an insurance company beforehand. One can also hire a broker who can settle claims on the policyholder’s behalf.

 

 

Holiday Home Insurance: Things to Consider

While buying holiday home insurance, you must consider the following:

  • Insurers in every country may provide different coverage in holiday home insurance. For instance, buildings external to the main house but part of the main property or swimming pool may not be automatically included in the average holiday home insurance in some countries.

  • Does the policy have a no claims bonus? You can save substantially if you are eligible for such a bonus.

  • Would you be letting out the home when you are not using it? If yes, you should get an insurance coverage against liabilities. Under the law, if a guest receives any injuries while staying at the property, the owner of the property is held liable for the injuries and may need to pay damages.

 

Holiday Home Insurance: Tips 

The following tips may help you get a good holiday home insurance:

  • Take an inventory of the things to be covered under the policy. A comprehensive insurance policy should be able to protect your building and its contents.

  • Your building coverage should be sufficient to rebuild the home in the event of total damage.

  • Approach a specialist insurer to get the best, most comprehensive and affordable holiday home insurance policy.

  • When hiring a local broker or notary, ensure that he is well versed with the terms and conditions of a holiday home insurance policy.

  • Ensure that your policy is written in English so that it is easy for you to understand.

  • When buying a holiday home insurance policy, do not skip reading the fine print before signing the policy. Do not hesitate to ask the insurance underwriter for a clarification if you are unable to understand some clause in the contract.

 

 


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