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Holiday Let Insurance Guide

Check out your holiday let insurance before your guests check-in

Self-catering holiday lets are experiencing an upsurge in popularity as people turn to booking their customised holidays direct with holiday let owners. Also, those with empty holiday homes are realising the income potential that holiday letting can generate, which contributes to mortgage repayments and maintenance costs.

However, many holiday let owners are leaving themselves exposed by not having adequate holiday letting insurance and underestimating the unforeseen that could destroy both their letting season and guests holidays.

So before your guests arrive at your holiday cottage or villa, ensure your holiday let insurance is protecting you for the following...

Letting your holiday home could invalidate insurance

This might seem obvious, but check that your insurance company is aware that your holiday home is a commercial holiday let and not just used by your family and friends. Some insurers will limit, alter or invalidate cover (e.g. accidental damage and public liability) when the property is used for holiday letting. This could lead to expensive consequences following a loss or damage, only to discover you're uninsured.

Public liability insurance for holiday lets

Letting season is in full swing and unfortunately accidents happen. If they do, you don't want to be held legally (and financially) responsible for any injury to third parties. Public liability insurance for holiday lets is essential, especially with the current trend toward litigation. It enables you to safeguard yourself from any legal hassles that are associated with renting out your property, should you be legally liable.

For example, if a holidaymaker gets injured because of faulty wiring in your property, or slips in your cottage, they can take you to court and sue - leaving you to face a legal battle and the prospect of compensating for injury and loss of earnings.

Even if you just let friends use your holiday home without charge, they can also sue you for damages if they have an accident.

This should also cover you or your guests if someone else's property is damaged e.g. fire or flooding an apartment below.

Check that your public liability insurance covers:

• a minimum indemnity limit of between £3 to £5 million
• covers liability claims arising from an accident involving your swimming pool, for example slip and trips or cuts from broken tiles
• if you employ casual labour in the process of running your holiday let, you will need employers liability insurance cover to protect you against legal action from injured domestic employees - such as caretakers or changeover staff.

Accidental damage to contents insurance

When holiday letting, it is likely that your property will have an array of equipment that is likely, by the law of averages, to be damaged by a constant stream of visiting guests.

Comprehensive holiday let contents insurance that covers accidental damage (including malicious damage) by holidaymakers is essential to protect you from incidents, such as - a damaged TV, cigarette burns on the sofa or wine stains on the carpet.

Check that your holiday rental insurance extends to cover damage by guests when renting, as some policies only cover damage by family members. If you market your holiday rental as 'pet friendly' ensure your insurance also covers damage by pets. Accidental damage cover can take the worry out of letting strangers into your holiday rental who might not be as careful as you.

Note: Although it is recommended that holiday rental owners take a refundable damage deposit from guests, you still need insurance should the damage far exceed the deposit taken - a fire for example.

Theft cover

Unfortunately break-ins are common, especially in summer as holidaymakers offer prime pickings after arriving with cash, cards and small valuables. Ensure your holiday lettings insurance also covers theft by non-forcible entry, as someone might gain entry using a key (old contractor, force the keysafe etc.) or through an open window. Is theft by guests covered?

Also, check that your expensive garden furniture is covered for theft whilst it's left outside.

Note: Remind holidaymakers in your booking contract that it is their responsibility to take our travel insurance to cover theft of their personal possessions.

What happens should your holiday rental become uninhabitable?

Dread to think something serious happens during the holiday letting season which results in your property being uninhabitable, a flood or fire for example. If the worst happens you'll need to have your self catering insurance fix things as soon as possible.

Alternative accommodation costs

If your holiday let is occupied you will need to put you, your family or rental clients in alternative accommodation - being a holiday rental or hotel. Your insurance should cover these expenses.

Emergency travel expenses

Does your insurance cover the cost of emergency travel expenses? Check it does because you'll probably need to be onsite to get things fixed and oversee repairs following loss or damage.

Loss of rental income

If your holiday home becomes uninhabitable, all the rental income from your advanced bookings can be lost overnight. Check your policy covers you for loss of rental income so you don't lose out. This cover is essential during the peak summer months when owners rely on income to contribute to running expenses.

Check that the maximum figure that you can claim under the three areas discussed above is sufficient.

Check for security warranties in the small print

Does your insurer insist specific security measures are in place when your holiday rental is left empty, such using specific window/door locks or locking shutters - even for a short period? Is your insurance null and void if these security measures are not utilised?

This can be a problem as getting guests to lock the shutters every time they go out (to the shops, beach, pool area etc.) would be difficult to police and unreasonable. Check your security obligations with your insurance company.

Protect your holiday let

Before your holidaymakers check-in, check out the advice above to ensure your holiday letting insurance protects you and your guests should the worst happen.

Our holiday let insurance is designed for holiday home owners who commercially let their second homes in the UK and abroad. The holiday lets insurance offers extensive protection to safeguard against risks when letting.

For further guides and advice read our blog.