Holiday Cottage Insurance - beware the special terms.
I am always discussing insurance with both existing owners and first time renters as it’s crucial to have the right cover. It seems that insurance for holiday letting is particularly prone to big variations in price but as ever the real danger is in the small print; the cost of missing a special clause could be huge in the event of a claim.
So what are the particular issues for insuring a holiday property?
- Public liability- at least £2 million cover and often more is included. This is essential as the current environment seems to be that every accident is somebody’s fault and guests who have a fall will often rush to a claims lawyer.
- Employer’s liability- do you employ a cleaner directly, if so you may be liable if they have an accident and it won’t be considered a ‘public’ liability.
- Loss of rent cover- If you have a flood in August you could end up losing several weeks at your highest tariff which is very painful if you are not covered.
- Legal protection- always worth having as it generally adds very little. You’re unlikely to need it but if you do get sued for something not covered by public liability the costs will be large.
- Damage by guests – you’d think this would be one of the central points of holiday cottage insurance but it can be excluded.
- Beware the small print- clauses to watch out for;
- Unoccupancy Clause – This can vary widely and I have seen some that would be almost impossible to comply with. Typically it may say that if the property is empty for more than a set period- normally 30-60 days then special terms apply. This could be weekly inspections, maintaining a certain temperature or even draining down the water system. Check carefully as poor policies may have a 7 or 14 day limit. It’s also possible that cover may be withdrawn for some things during periods of unoccupancy.
- Excess – obvious but a cheap quote may be produced on the back of a high excess meaning you could be responsible for the first £500 or more of a claim.
- Special excesses – the headline excess may be reasonable but further in the small print a higher one may apply in some circumstances. £1,000 Subsidence is normal but look out for extra excess for ‘escape of water’ or accidental damage.
- ‘Malicious damage by guests- if you have a clause excluding this it’s a grey area- what is malicious? You may find a broken door or furniture not covered.
Things you won’t be covered for:
- Damage by dogs or other pets – everyone seems to exclude this nowadays so be aware that you will be footing the bill if you have an irresponsible dog owner.
- Fences, gates etc – very pertinent after this winter, we lost quite a few and generally not covered.
- Contents left in the open- if somebody pinches your garden furniture or anything else left out you won’t be able to claim.
- Previous history of flooding- don’t think that because an insurance company has taken your money that you are covered. They won’t bother investigating unless there is a claim so if you are buying a new house find out if it has ever been flooded and make sure you can get cover before committing to the purchase.
Finally I always prefer to deal with a broker who does a lot of holiday insurance rather than a call centre. It may be a little more expensive but it’s worth it to get the right advice and support if you need to make a claim.