Research has shown that 10 per cent of UK second home owners fail to take out second home insurance!
Considering the extra risks involved in a second home, this is astonishing. Insuring your second home is a least as important as insuring your first home.
If you own a second home, there are three possible occupancy levels:
1. Holiday let as a business.
2. Mainly for your own use but let out sometimes.
3. Solely for the use of yourself, your family and friends.
Each of these occupancy levels carries its own risks. Of course if you are in the holiday let business, you require a specialised holiday let insurance. However you may not be interested on going into the holiday lettings business but just want to let it some of the time to help with the finances – you must be absolutely certain that your insurance policy allows this. In this case the property will not have such lengthy periods of lying empty, but there is more risk of damage from tenants.
So what does your second home insurance need to cover you for?
• Obviously you need buildings and contents insurance. The insurers will need to know how often the property is going to be occupied and by whom. Periods of longer than 30 days’ unoccupancy will carry a higher premium – this will cover the extra risks of fire damage, water damage, burglary and vandalism when the house is empty. However, if you fail to secure your house properly or take adequate precautions against water damage, you may find you are still not covered.
• If the house is going to be occupied by anyone other than your immediate family – even friends – you must have public liability insurance. This is a legal requirement. You need to be covered against anyone suffering any sort of accident or injury while on your property.
• Unless your second home is within easy reach of where you live, you may well need to employ a caretaker or cleaner to look after it. In this case you will need to have employer’s liability insurance.
• If your second home is ever let to tenants, make sure they realise that your contents insurance only covers your property, not theirs. They need to have their own insurance for their own belongings. It’s a good idea to check the inventory with them at the beginning and end of their stay, and also to charge them a refundable deposit to cover any damage or breakage.
Don’t think that you can just take out an extension on your main home insurance to cover your second home – you almost certainly can’t. By definition, a second home won’t conform to the conditions of your main home insurance. However, you shouldn’t begrudge the costs of your second home insurance. There’s a lot of enjoyment in having a second home. If you suffered an uninsured loss, it would all be ruined.