- Make sure that you have the right type of insurance cover for your holiday lettings business
- Make sure you are aware of all the risks involved with holiday cottages and holiday lettings and take steps to minimise these.
Choosing Letting Insurance for Holiday Lets & Cottages
Rather than leave their holiday homes empty for long periods, owners are increasingly turning to holiday letting to earn income from their investments. But there are associated risks with holiday lets that can lead to costly consequences should something go wrong.
From injury to third parties to break-ins, damage by guests or worse still a flood. These are just a small number of unforeseen incidents that could cause loss or damage to your holiday let.
Sounds daunting? Don’t worry. If disaster does strike there are specialist insurance policies for holiday lets that are designed to safeguard your investment and get you back in business should the worst happen.
Essential Insurance Cover for Holiday Lettings
A standard house insurance policy will not provide the specialist cover that is required for holiday letting. In addition to protecting your buildings and contents, the additional types of cover you need to consider are:
- Public liability insurance – this is essential, particularly with the current trend toward litigation. It enables you to safeguard yourself from civil actions brought by guests who sustain injury on your property. Potential claims vary from slips and trips on paths or in the bathroom to injury from falling roof tiles or faulty electrical appliances.
- a minimum indemnity limit of £3m is recommended, but some letting agencies will insist on this level.
- if your holiday let has a swimming pool check you are covered for liability claims arising from the usage of your swimming pool in the event of an accident
- Employers liability insurance – will protect you against legal action from injured domestic employees, such as caretakers or changeover staff that you employ in the process of running your holiday let.
- Accidental damage to contents – it is likely that the constant influx of guests or even you will cause damage, although unintentionally. In any event, in order as to keep standards high and not inconvenience other guests your insurance should replace or rectify any damage. Common claims include wine stains on furniture, damage to electrical items or even overflowing baths. Any malicious damage caused by unruly holidaymakers should also be covered.
A useful tip is to consider taking a refundable damage deposit from guests to cover any claims excess following damage.
- Loss of rental income – if your holiday home becomes uninhabitable what happens to all the rental income from your advanced bookings that you are relying on? Choose an insurer that will compensate you for loss of rental income, as you will probably be expected to refund any monies paid to disappointed holidaymakers.
- Alternative accommodation provision – in the unfortunate event that your holiday cottage becomes uninhabitable following a flood or fire; for example, any costs to provide alternative accommodation for your guests should be covered. Although your resident guests may be sympathetic to your situation, it is likely that they will expect to put up in a hotel or similar standard of accommodation to yours.
- Emergency travel expenses – you may need to travel to your holiday home to get things fixed or oversee repairs following a claim. Will the insurance cover the cost of emergency travel costs incurred?
- Burglary/Theft – guests often aren’t as careful as owners when it comes to security. Windows or doors often get left open and keys get lost. Check any compulsory security requirements in the insurance policy document and whether cover is null and void if these security measures are not utilised, leaving you to foot the bill.
- Leaving your home empty –It is likely that bookings will be seasonal and your holiday let will be left empty for long periods throughout the winter months. During this period your home will be at risk from frozen pipes and water damage. Consequently some policies will reduce or exclude certain cover unless your property is regularly inspected or a minimum temperature is maintained.
What are my Insurance Obligations as Holiday Let Landlord?
- It is essential that you understand your obligations regarding any warranties in the small print that could invalidate a claim if not adhered to.
However, there are policies available without stringent terms so shop around.
- Cancellations – remind holidaymakers that it is their responsibility to take our travel insurance to cover any of their personal possessions during their stay and any charges imposed by you if they cancel the booking.
- Whether its your first holiday letting season or you are a veteran in the business, it is wise to protect both your property and your guests against the unforeseen, so if disaster does strike your insurance will take care of matters. On a final note don’t compromise on cover to save money, it’s false economy.
Content here supplied by Schofields specialist providers of holiday let insurance for holiday homes in the UK and abroad.