A holiday home can be a solid investment if managed correctly. Having others stay in the house through the year and using it yourself when you need to means in many ways you get the best of both worlds. But like any investment, it isn’t without its risks. Renting out any property means you’re dealing with tenants, many of whom can be unpredictable. It’s also important to cover the building itself in case of damage.
Covering your interests is a must to ensure you’re looked after if things do indeed go pear-shaped. This article will go into a few of the considerations you need to make when looking at getting insurance for the holiday property.
1. Get The Right Advice
While it’s a good idea to have a general idea about the kind of insurance policy that is right for you, it’s worthwhile to have a professional go through your options with you. An insurance broker will be able to look at your circumstances, the value or your property and your tenant situation and recommend the ideal policy.
2. Insure Your Contents
A lot of standard home insurance packages won’t include contents insurance, but given that holiday homes will usually see a lot more people coming and going over the course of a year, it’s arguably more likely that you’ll come across a tenant that is negligent or is prone to causing damage. Contents insurance will usually cover you for the standard fire, flood and theft and includes furniture and household goods – however it’s important to go through the fine print and be sure exactly what it is your covered for. Some policies will include fittings, kitchen and bathroom furniture which is probably advisable. Also, but sure that accidental damage on the part of the tenant is covered.
3. Employer’s Liability May Be Necessary
If you have a larger holiday home that requires private gardeners and cleaners, it may be worth thinking about employer’s liability insurance, which can be worked into your policy. This will cover you for the legal costs that would be incurred in the unlikely case that one of your employees is injured on the job.
4. Think About Possible Loss Of Rental Income
Loss of rental income insurance will cover you in the event of the building being damaged (due to unforeseen circumstances) and not being able to be rented for a set time period. While regular building insurance, which will cover the costs of repairs, this insurance exists to compensate you for this loss of income that you would otherwise have got. Whether this is necessary for you will depend on the rental situation you have at your holiday house. If there are long periods in which it the house is empty and you aren’t greatly reliant on this income, it may not be highly necessary.
5. Don’t Misrepresent Your Situation
Keep in mind that you should be always be as upfront and straightforward with your insurance broker. Providing false information about contents or the nature of the building is simply not worth the risk given that if discovered, it can render the contract invalid. Remember that when circumstances change, you need to disclose all new information to your insurer.
There are many different holiday home insurance policies available; it’s all about finding that one that suits your needs. For more information, contact SGUA today and have a chat to someone that can guide you through the process.