Top tips on insuring your holiday home

Here are some useful pieces of advice relating to holiday home cover:

  • don’t ignore the risks your property faces.  However idyllic its surroundings and however low crime is in the area, your property may still be hit by misfortune in the shape of things such as natural disasters, burglars or vandals etc.  Contrary to some myth, these problems are not restricted to the United Kingdom;
  • check your local legal obligations.  In some countries it is a legal requirement to maintain certain minimum levels of property insurance.  If you are using a mortgage provided by a local lender, you may find that the loan agreement requires you to maintain insurance cover to the full replacement value of the property.  Failing to do so could cause you serious difficulties and result in you being in breach of contract;
  • think about language.  In any country it is particularly important that you understand the finer detail of your insurance and essentially just what you are getting for your money, what is covered and what is not covered etc.  Make sure that you have translations of your documents if you purchase insurance locally or alternatively consider purchasing your holiday property insurance from a UK provider in English;
  • watch out for currency fluctuations.  If your income is in Sterling but the costs of your insurance are in a foreign currency, then the insurance that appears to be very cost effective when purchased locally, might not seem so should Sterling sink in value relative to the local currency.  Of course, this concern would not apply if you have purchased your cover in the UK and had paid for it in Sterling;
  • pay attention to the terms and conditions.  Linked to the language issue mentioned above, if you are purchasing your cover in a foreign language make sure that you completely understand the terms and conditions.  These may link your continuity of cover to your compliance with certain practices, something that you may find it difficult to achieve if you didn’t know that the requirement existed in the first place;
  • take note of mandatory policy terms (period of cover).  In some countries you are not free to simply cancel your insurance and take out a new policy if you are not happy with the one you have.  In some legal environments you may be obliged to stay with your policy for a full 12 month term and even then give two months’ notice in writing of your intention to change it;
  • if you purchase a policy locally and subsequently need to make a claim, make sure that you do so in writing and with expert translation assistance.

You may well have invested a substantial proportion of your available capital in your holiday property.

Making sure that it is correctly and fully insured may be a sensible step to take.