Why is holiday home insurance more expensive?
We are often asked what is the difference between holiday home Insurance and a standard home insurance policy, typically the caller will want to know why they have to purchase this type of contract and more importantly why does it cost more money.
Basically, there are subtle differences between the two types of insurance, both offer a wide range of perils and both policy wordings should satisfy the council of mortgage lenders handbook, essential if you have a mortgage on the property.
The holiday home wording is specially designed for property that is not in use all of the time or is used for commercial short term letting. Its style, policy endorsements and warranties will reflect the usage of the building and you may find the policy excess to be a little bit higher.
Holiday Home Insurance polices are usually a little bit expensive as in essence there is an increased possibility of a claim occurring, more risk equates to more insurance premium.
What are the extra risks?
Holiday home properties are often left empty for extended periods of time and this un-occupancy can lead to an increased chance of a loss primarily from burst pipes. Many insurers require you to leave the heating on in the property at certain times of the year to help mitigate the chance of this happening. In our experience, we have found than when a burst pipe does occur, it is often a little while before the owner of property realises what has happened and by this time the damaged caused could be quite substantial.
Unoccupied holiday homes are also at a greater exposure to claims from burglary particularly property that is located in isolated areas. If you let your holiday property, there is also the need for liability insurance and all of these considerations have to be factored in to the price.
For many insurers , this increased risk is unacceptable and they simply wont offer any cover. If you are calling around for quotes, it is of paramount importance that you inform the insurers of the exact use of the property, failure to do should could lead to problems in the event of a claim