The holiday let industry is a newer phenomenon in the UK. It has gained momentum over recent years due to the ease of renting your home through outlets such as Airbnb, Homeaway, Booking.com and many more.
As a property manager of holiday lets, we are often asked what is required before renting out a home. At Simple Getaway, we can take over the vast majority of requirements, however, there are some things we are unable to do without being the property owner. One of those trickier items is insurance.
Home insurance for holiday lets is different from the insurance you have for your full-time home. Insurers state that your holiday let can be unoccupied for a long time, resulting in a greater risk of theft or damage. In addition, if you let your property out for financial gain, whether by yourself or through a property manager like Simple Getaway, your risk increases further. There are many options available for holiday let insurance if you want to let your property out, but it is important to understand the requirements and what is essential to limit your exposure.
Standard Property Insurance
There are three main types of insurance, all of which would be required for a holiday let just like they would your own home:
Buildings Insurance
Firstly, buildings insurance. Buildings insurance typically covers your home in case of loss due to fire, floods or other events. It essentially covers the cost to rebuild your home if it is lost due to an incident.
Contents Insurance
Secondly, contents insurance. For holiday lets, this is just as important as your personal home. Though you may not have stocked your holiday home full of antiques and sentimental goods, contents insurance is crucial to cover the loss of any furnishings, in addition to, carpets, curtains and white goods. If you are setting up your first holiday let, keep track of all of the costs so you can get an accurate quote to your insurance agent.
Accidental Damage
Thirdly, accidental damage. Most policies will cover theft and break-ins, but given the nature of holiday lets being unoccupied more than your personal home, it is wise to add accidental insurance. Moreover, it may be a good idea to have some security measures in place to protect your holiday let.
Specific Holiday Let Insurance
There are three additional insurances that are not covered by your standard home insurance policy which are crucial to have before renting out your holiday let.
Loss of Rent Insurance
Loss of Rent insurance is extremely important. Should your home be damaged and you have to rebuild part or all of the structure then you will be missing out on a significant amount of rent whilst your property is being repaired. You will have to estimate the losses based on past or expected data, but with loss of rent, your insurance company will cover the lost revenue until the property is rebuilt or repaired. Usually, this loss of rent is covered for a limited time period and limited payout so you would need to speak with your insurance agent to get the specifics.
Liability Insurance
Liability insurance is another extremely important insurance to have. Public liability cover for your holiday let will cover any of your guests for bodily injury or damage caused at the property. In addition, employer liability insurance will cover any staff injuries caused at the property, perhaps by members of the property management company, cleaners, maintenance staff, gardeners etc.
Holiday Let Insurance
Lastly, holiday let insurance can provide you with legal expenses cover. This will help to cover any expenses you may incur due to disputes with renters, for example, if there is an accident on the property, or if they refuse to pay for damages. Legal expenses add up very quickly so it’s important to have this cover to limit the exposure to you.
Make sure your insurance agent has specific experience in the holiday let insurance. There are plenty out there to choose from, just confirm the specific coverages with them before signing on the line.
If you need more help from us at Simple Getaway, contact us. Though we cannot claim to be experts in holiday let insurance, we are certainly experts in property management and would love the opportunity to see how we can help you!