KEEPING YOUR INVESTMENT SAFE
INSURANCE H
oliday homes differ from our main residences in the UK in many aspects and this includes the way they are viewed by insurers. By their very nature they are left
unoccupied for long periods, or they are rented out to third parties and may be in earthquake zones or hurricane belts. Whilst of course you must always shop around
for the best premium costs, there are also lots of peculiarities regarding insurance requirements or types of cover between countries. For example, in Turkey it is law to have
earthquake cover (dask), while earthquake cover hasn’t been historically available in Italy (quakes are regarded as an Act of God) yet just in the past year some companies have begun to offer it. In France, theft cover is especially strict, and
there are also tight deadlines on claims for fl ood or storm damage – that can be missed if damage is only discovered weeks after the event by those with a second home they visit occasionally. Beware of local peculiarities too: subsidence
cover isn’t available in every European country and in Florida you need a separate fl ood policy if your home is in one of the designated “fl ood zones” although the cost is relatively small ($300 a year on some homes).
What to insure Premiums for buildings insurance, calculated on the type of property and number of bedrooms, covers you against damage to your permanent fi xtures and fi ttings, typically with a blanket cover of up to €1million (covering the cost to rebuild the property). The sum insured should be index linked, so
updated yearly. Features that tend to increase a premium are a private pool/hot tub, conservatory and non-habitable outbuildings. Appliances, bikes and furniture tend to be covered under a contents policy – the value of these items should be calculated on a “new for old” basis. Typical premiums might be between £200-
300 for a two- or three-bed property in Europe, and £500 for a three-bed villa in Florida. There, having a “four-point” home inspection can result in substantial savings in premiums, even though you need to pay a small fee for them. Anyone buying in a community or development
40 AIPP CONSUMER GUIDE
should check what their communal insurance includes – usually it’s just the communal parts of blocks. For example, with condos in the US, interior walls, fi ttings and kitchen cabinets are not included. When it comes to choosing an insurance
provider, often the easiest route is to choose a UK based insurer, many of which include public liability insurance - essential if you plan to let your property - with their standard holiday home policy. Public liability limit offered by UK companies is
usually higher than that offered by local insurers abroad: in Spain you might be covered for up to €300,000, while €5million is not an uncommon limit in the UK. Some UK insurers also include cover for loss
of rental income following a claim, as well as emergency travel and accommodation in case you needed to travel to your property in an emergency. Typically, you’ll always pay extra (around ten per
cent of the premium) for accidental damage cover, which includes damage not only done by you or guests but also paying tenants. Other benefi ts of a UK insurer include being
able to make payments in sterling and speak to them in English – some also offer a 24-hour English-speaking helpline to assist with emergency situations in the property.
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