Holiday Home Insurance Claims
Switching insurance policies every year is a hassle for landlords, and can sometimes be unnecessary. There are often discounts accrued for landlords with a no claims history. Yet if you are an experienced landlord and have suffered an insurance claim in the past, you will appreciate that the number and severity of previous insurance claims, can adversely impact your future annual renewal premium. So if you are considering buying a holiday home that needs to be furnished for your guests – think carefully about the type and nature of fixtures, fittings and equipment you plan to buy for the property.
Most holiday home owners and second home owners can furnish their rental property in such a way, that may help to reduce the cost of an insurance claim made in the future. Although future insurance claims are statistically inevitable, (due to unfortunate accidents or a host of other unpredictable events) – by applying some practical commonsense – you can be proactive in proving reliable, compliant and durable fixtures and furnishings, to help reduce the impact of future insurance claims.
Before you furnish your holiday home, you will need to find an appropriate holiday home insurance policy. Your mortgage company will insist you provide evidence of cover from the point of exchange of contracts. You should check the policy wording to see what contents and buildings covers the policy provides. A mortgage lender will certainly expect the buildings section to have a certain number of perils covered.
As you are letting out your holiday home, you should make sure your cover is appropriate for short term rental properties where tenants are frequently coming and going on a regular basis. Inevitably, there will be periods when the property remains empty between tenancies. During this period of un-occupancy, the furnished contents are more at risk from theft, or accidental damage from burst pipes, hence the reason that many insurance companies will not cover holiday homes or demand a higher premium.
Lastly, most holiday home insurance policies provide various liability covers, including public liability cover. If a guest suffers an injury within your holiday home, they may blame you for what they see as your negligence to prevent the event from occurring. Liability can arise from an act of negligence if it is determined that you failed to act in a certain way in a reasonable manner. If your negligence results in an accident within your holiday home – it can lead to a personal claim for injury or damages from your tenant. This usually involves legal costs and potentially court costs.
Before you furnish your holiday home, consider the expectations of your guests. Most guests expect high quality fixtures and fittings that are safe and easy to use. Check that any items of high value are not above the thresholds set by your insurers, you may have to list them separately on the schedule of insurance. When buying equipment for your holiday home remember that shorter term holiday lets, are likely to generate a higher proportion of insurance claims, than holiday home rented out on an assured short hold tenancy. This is because holidaymakers tend to pay less attention to maintaining equipment or furnishings themselves, or looking after the furnishings and decor. They are in ‘holiday mode’ – relaxed and enjoying the break. Perhaps enjoying a drink or two, and making the most of the facilities at the holiday home. Whereas long term holiday lets have a greater respect and thoughtfulness for what they see as ‘their home’ – particularly as they are the ones who have to clean up and live in the property for a far longer period of time.
Next to avoid unnecessary accidents and blame, consider the practical aspects of letting your holiday home fully furnished. The safety and comfort of your tenants is paramount. As a minimum, you have common law duties as a landlord. Any fixtures and fittings you purchase should comply with the latest statutory laws and safety regulations related to gas, electricity, oil, chimney and flues. Make sure all smoke detectors are mains connected and all furnishings are fire resistant compliant. If you are providing a barbecue, pay for fire extinguishers and a fire blanket. When you purchase your property, check and arrange to mend any broken paving slabs, broken glass in windows or door panels and loose hinges. If you are letting out a holiday cottage with a chimney, make sure it is properly cleaned and a fire guard is purchased to keep tenants from falling into it accidentally.
Many holiday homes are marketed for families. So if you purchase any child related equipment (such as swings, trampolines or toys), keep the instruction manuals for tenants (to make sure accidents and blame can be avoided). Similar more serious accidents can occur in swimming pools or hot tubs. So make it clear in a written welcome pack, the potential dangers of leaving children unattended near water. Your welcome pack should try and list all possible dangers where equipment is involved.