If you own a second home abroad, letting it out when you?re not using it can be a convenient source of easy income, not to mention the reassurance that your property is in use and being looked after rather than sitting empty. Unfortunately in reality it’s not that simple and there are risks involved in allowing strangers to stay in your holiday home. After all, you have a lot of money invested in your place in the sun, and letting, although the benefits are clear, increases the risk to your property and possessions. But it is a problem easily solved, all you need to do is make sure that your insurance for second homes policy covers you for the type of problems that could arise from letting your holiday home.
A lot of insurance policies for holiday homes do not include cover people other than family and friends, so make sure you get a specialist holiday home insurance policy, which will allow you to rent the property to other tenants. Of course the risks of allowing strangers into your holiday home are obvious, so choosing a policy that includes accidental damage on the part of those strangers will help reassure you that you are protected for any eventuality. Another thing to consider is what you would do if something did happen to the property and the potential loss of rental income ? some policies will not only cover this cost but also provide alternative accommodation for you and your tenants in the event that the property is uninhabitable.
The main thing to remember when choosing an insurance policy is to always read the small print. You might find that house insurance in Spain, Italy and other popular holiday destinations is cheaper to buy from the country in question, but these European policies for holiday homes are often a lot more limited than UK policies in the cover they offer. For instance insurance policies in many European countries do not cover property against damage caused by a guest or tenant as standard, because in these countries it is assumed that visitors will be aware they should have their own ‘liability insurance’ policy. This type of insurance could put off potential visitors from the UK as they would have to pay more for their travel insurance, not to mention the fact that if anything did happen and the tenants were uninsured, you wouldn?t be covered. The easiest solution is to take out a second home policy based in the UK, where public liability insurance is included in the premium as standard.
Another common mistake that holiday home owners make is accidentally signing a policy that requires them to visit the property once a week to perform regular checks. Failure to do this would mean the policy was invalid but obviously when your second home is hundreds of miles away this is just not possible. Fortunately not all insurance policies have requirements like this, so shop around for the best deal but remember that it is still advisable to have the property checked regularly (by an agent or reliable trustworthy neighbour) for your peace of mind and in case anything does go wrong while you are away.
