Although the Euro is struggling at the moment in the financial markets, the strength of it over the last few years on the exchange rates, compared with the pound has made many investors in the holiday/second home market think twice about a “place in the sun” – the weaker currency has led to an increase in the second/holidays homes being bought in the UK. However, research suggests that many investors are not thinking about all the costs involved – such as affordable household insurance.
Many do not realise having your second/holiday home insured is just as important as having your main home insured. Building insurance is still compulsory with mortgage providers when you purchase a property, whereas it is only advised that you should take out contents insurance to cover for unforeseen happenings such as accidental damage, fire flood and of course burglary. Cheap home insurance is available for those willing to take limited policies, and as the property will be empty for large periods of the year, there is no good reason for cover not to be taken out. It is, however, imperative that specific second home insurance is bought, as it is a completely different product from the cover taken out on a main residence.
Because it’s a holiday home the possibility is that the property will be left unoccupied for weeks or months at a time (making the property vulnerable to burglars, burst pipes and other perils) and no-one is in the house at the time, a minor emergency can easily turn out to be a big financial disaster. Another way of limiting this risk is to employ a property management company who, for a monthly fee will make sure appropriate checks are carried out on a regular basis – a more ad-hoc arrangement may be possible with neighbours who live in the area full time. Whatever choice is made it will guarantee the investor peace of mind to a large extent.
It is important to check your insurance policy as some will exclude burglary claims unless all doors and windows have locks that meet a specified standard. Also, many insurers will not pay out a claim if there is no evidence of a break-in. Never, ever leave a spare key under the doormat, make arrangements with your property watcher, and don’t forget to change the batteries in the smoke alarms as these could invalidate your insurance.
Tags: Home Insurance