Holiday home insurance

Do I need special insurance for a holiday let?

Whilst holiday home insurance is not a legal requirement, like your buildings and contents cover it is highly recommended. 

It can protect both you and your guests from damage, as well as the building structure and any items you store within it. 

If your home is empty for more than 30 consecutive days your standard home insurance is unlikely to cover you.

Additionally, standard home insurance only covers one property - so if you've got a separate holiday home, it'll need to be insured.

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How is insuring a holiday home different from insuring my permanent home?

You won't be living it in full time and therefore the risks involved in the property are different:

• If a leak occurs or an electric fault sparks up it may take longer to be discovered and therefore the damage caused could be significantly higher
• Empty houses are easier to break into
• Paying guests may cause damage to your property or injure themselves.

The insurer will take this into consideration when offering you a policy and will need to know all the ways you use your additional property. 

• Find out more: Best home insurance 2024 

Types of holiday home insurance

Holiday let or host insurance is additional insurance that will cover home-owners who let out their property to paying visitors. 

It should be taken out in addition to standard home insurance and will not be necessary if you use your second home for business purposes.

Holiday home insurance will cover events such as fire, water leaks or accidental damage caused by a guest. You won't be covered for claims that fall under standard home insurance cover such as storm damage or a flood. 

If your holiday home is going to be unoccupied for a long time because you don't rent it out and just spend your summers there you may be better off with unoccupied home insurance cover. 

If the home you are renting out is a cabin or chalet you will need to take out non-standard insurance, that helps cover materials such as wooden walls and thatched roofs. 

What does insurance for holiday homes cover? 

Similar to your home insurance, your holiday home cover will protect your home as well some necessary additions; 

• Standard buildings insurance and contents insurance - cover for the building and your possessions inside it 
• Accidental damage cover - unanticipated damage caused by you or your guests
• Emergency travel - if you need to travel to your holiday home to fit a leaky dishwasher or burst pipe 
• Loss of income - if you are losing money from your holiday let due to damage or repairs
• Liability insurance - cover the cost if someone takes you to court because they have been harmed in your home and you'll also need this if you employ any staff

It may not cover stag or hen parties, if the let is for an extended period of time or if you have more than a certain number of bedrooms. 

If you are planning to use your holiday home for these reasons, check with the insurance provider before taking out a policy. 

• Find out more: Is flooding covered by my home insurance?

Will my home insurance cover me if I'm renting out a room on Airbnb?

Standard home insurance policies usually don't allow for your home to be used for commercial gain or business purposes.

Let your insurance provider know your plans of renting out a room and see what they can do for you. 

They may offer you additional standard cover or recommend you take out host insurance. If you are not honest with them, they could invalidate your insurance and put you on the fraud register. 

A number of policies offer host insurance as a standard add-on, and you'll just need to request it. This will increase your monthly premiums but will save you in the long-run if a guest damages themselves or your home. 

AirCover

Airbnb does offer its own AirCover insurance when you apply to be a host. 

However they stipulate this is not a substitute for having your own insurance and what they offer is not an insurance policy contract. If something were to go wrong you could not go to the Financial Conduct Authority for support. 

• Find out more: Home insurance: add-ons, fees and charges explained 

Do UK insurers cover overseas holiday homes?

Yes, UK insurers commonly offer coverage for holiday homes abroad, including buildings and contents insurance similar to UK residential properties. This means you can secure comprehensive coverage without needing insurance from the country where your holiday home is located. Popular European destinations such as France, Spain, Portugal, and Italy are often covered by UK insurers.

Choosing insurance from UK providers has its benefits. You'll communicate with English-speaking staff and have all your paperwork in English, making the claims process easier, especially if you're not fluent in the local language.

Coverage may vary depending on factors such as the risk of natural disasters in the area. However, UK insurers aim to cater to the needs of individuals seeking to protect their holiday homes abroad, ensuring peace of mind for property owners regardless of their location.

• Find out more: Overseas mortgages explained

How much does it cost to insure a holiday home? 

The cost of holiday home insurance will vary from property to property. Your insurance provider will take several factors into consideration such as size, location, how often it's occupied and the value of the property and contents within it. 

When considering how much you want to charge for your holiday rental to guests, it is important to take into account running costs, a mortgage if you have one and your insurance premiums.

If your fully furnished home qualifies with HMRC as a holiday let (available for commercial lets at least 210 days a year, among other conditions) your holiday home insurance will be an expense that is tax-deductible. 

What else do I need to consider before renting out my home?

It's not just insurance you need to think about when renting out a room or entire property:

• Your landlord - breaching your lease could result in penalties so check the terms and conditions
• Your mortgage provider - while short stay lodgers are generally allowed, check before you rent our your entire home. You may be asked to move onto a buy-to-let mortgage.
• Building rules - if you live in a block of flats it's possible there are rules on renting our your property
• Tax - income tax will apply to any money you make, though the rent a room scheme allows you to earn up to £7,500 a year tax-free (and avoid filling in a tax return) if you're also resident in the property