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A holiday home is usually a second property you and your family use for holidays, to let out to other holidaymakers or both.
Whether the property is your beachside bolthole or an Airbnb, it won’t be covered by standard home insurance. This is because it will be subject to different risks if it’s empty at certain times and inhabited by paying guests at others.
You’ll need special holiday home insurance or “holiday let” insurance to protect a holiday home. This guide explains how this type of insurance works and how to get the best home insurance deal.
A holiday home is a property you own that isn’t your main residence. As the name suggests, it’s used for holidays. The holidays may be taken by you, your family, friends, paying guests or a combination of these.
There are special tax rules for rental income from holiday homes. HMRC refers to these properties as “furnished holiday lettings” (FHLs).
To qualify as a holiday let or FHL for tax purposes, your property must be:
You are not obliged to let your holiday home to other people. You might just use it for holidays for yourself, family and friends and not try to generate an income from it.
Home insurance for a holiday home is different from standard home insurance because the way the property is used differs.
With standard home insurance, you’ll generally live in the property yourself with other members of your household, and it will be your main residence.
No one will live in your holiday home full-time. You may use it regularly, but it might also often be unoccupied. Unoccupied properties are a bigger insurance risk than occupied ones.
If you let your holiday home to paying guests, there are also extra risks, such as damage to the property or vandalism, or your guests might sustain an injury while staying in your property.
Specialist holiday let insurance ensures these extra risks are covered.
Buying the right insurance is important if you plan to let your holiday home as a business.
There are various types of insurance for holiday homes. The main ones are:
UK holiday home insurance is probably the most straightforward. The right policy can protect your property and contents from damage from storms, excessive rainfall, burglary, leaks, floods, vandalism and even total destruction.
Overseas holiday home insurance is more complicated. Some UK insurers will only cover homes in certain other countries. For example, Towergate holiday home insurance is only available in the UK, Spain, France, Portugal, the Republic of Ireland, Greece and Southern Cyprus.
And even if the country where your home is located is covered, there may be different rules; for example, it might not be covered for earthquakes in regions where these are common.
You may be able to buy insurance in the country where your property is located, but make sure you understand what you are signing up for.
You can buy holiday home insurance for static caravans, log cabins, chalets and other non-standard homes. But the construction of some of these property types might mean you need specialist insurance. For example, log cabins are built using wood or timber or from a kit, posing certain insurance risks.