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You, your holiday let apartment and your insurance

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You, your holiday let apartment and your insurance.
When purchasing an apartment to holiday let, you’ll rightly focus on the return on investment. As part of this research you’ll establish that there is sufficient demand for an additional holiday let in the location of your choice. As with any business decision it is important to stand back and let your head rule your heart! It’s important to avoid the following pitfalls:

If you are using a mortgage to finance your purchase make sure your mortgage provider is aware of your intention to holiday let the property.

Check with the freeholder / managing agent that there are no restrictions on the use of the property that will prevent you from letting it for short term holidays.

Likewise check with the freeholder / managing agent that the buildings insurance policy for the apartment block includes property owners liability for the shared areas and that holiday letting is an acceptable use of the apartments by the insurer.

At this point it is also wise to check if the buildings insurance extends to cover fixtures and fittings within the apartment such as fitted bathrooms, kitchens, and fitted bedroom furniture and wooden flooring and if so is accidental damage included? In our experience the buildings insurance for many blocks of flats and apartment blocks does not extend to cover the fixtures and fittings within the apartment and certainly not in the event of accidental damage.

Now that you have established the above, how can Boshers help?

We can provide you with a Holiday Home Insurance Contents Policy for your apartment to include cover for:

  • Your general contents
  • Fitted kitchens, bathrooms, bedrooms and flooring
  • Property owners liability insurance for commercial holiday letting

It is important that you insure for the correct replacement value, remember in the event of a claim your contents will be replaced on a new for old basis, therefore your sum insured must be sufficient to replace everything at the recommended retail price. Likewise with fitted kitchens, bathrooms and bedroom furniture you must insure for like for like replacement including the cost of installation and debris removal.

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Thank you for reading `You, your holiday let apartment and your insurance‘.

Should you have any queries or require a holiday home insurance quotation for your commercially let second home or apartment call us on 01237 429444 or visit us at www.boshers.co.uk/holiday-home-insurance

 

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Holiday Home Insurance – Are you fully covered?

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Holiday home insurance specialists, Boshers Ltd advise furnished holiday let owners to review their cover and in particular to check that sums insured are correct. Mark Lavington, Director of Boshers Ltd said that, “many holiday home owners will find that their holiday home insurance falls due for renewal during the Spring and early Summer as this is often when properties were purchased or began their life as furnished holiday lets. This is therefore a poignant time to ensure that you have sufficient cover”.

Suitable holiday home insurance will give you peace of mind should the worst happen, however you’ll need to ensure the correct buildings and contents sum insured are specified to ensure the right amount of cover is provided as the implications of underinsurance can be costly.

Holiday Home Insurance. Are you fully covered?

Underinsurance

It is important not to underinsure your holiday home property or its contents. This is because if you only insure for say, 50% of the reinstatement value of your property or contents you stand to have any claim payment reduced by half and you will be considered as your own insurer for the difference and thus bear a rateable proportion of the loss accordingly. The guidance below will help you calculate the correct figures and avoid the potential for underinsurance.

Rebuilding Costs

Your holiday home buildings sum insured should represent the amount that you would have to pay to rebuild your holiday home again should there be a total loss e.g. in the event of a fire. This should include the cost of rebuilding boundary walls or fences, reinstating driveways and outbuildings. Internally you will need to consider fixtures and fittings such as built in bedroom furniture, kitchens and bathrooms as well as redecoration, basically everything that is fixed and would be left behind if you sold the property.

The Association of British Insurers’ (ABI) rebuilding cost calculator is designed to help you assess the rebuilding cost of your property, if it falls within a range of standard house types. There is of course no substitute for instructing a professional Surveyor to prepare a Rebuilding Cost Assessment for insurance purposes. The RICS web site can be used to search for a Chartered Surveyor (http://www.ricsfirms.com/) in your area.

Index linking

Because your holiday home insurance buildings sum insured is index-linked (i.e. it’s adjusted according to inflation), if the worst happens and the sum insure is sufficient your claim will be paid in full up to the sum insured. It is none the less, important that the sum insured as well as being correct at outset, is also increased to reflect improvements that you make to your holiday home, such as adding an extension, conservatory or a designer kitchen or bathroom.

Contents Calculator

Your holiday home contents sum insured is the total value of replacing your holiday home contents with new items, should there be a total loss e.g. in the event of a fire. It’s important that your sum insured is correct so that your insurer can quickly pay any insurance claims you make.

The most effective way of working out your contents sum insured is to draw up an inventory of all the contents in your holiday home, room by room. Against each item write the replacement cost for a similar brand new item. The contents of your holiday home includes everything that isn’t fixed, which you would take with you if you sold and interestingly also includes carpets, so ensure that you allow sufficient to re-carpet throughout. In respect of books, works of art, television and audio visual equipment a single article limit may apply, be sure to check that you have sufficient cover and for items exceeding these limits please refer to your broker for further advices. Index linking may apply to the contents section of your Holiday Home Insurance policy; however it is important that you ensure that the sum insured is sufficient at outset and each renewal. In today’s market this is particularly pertinent as competition for guests dictates that holiday homes are increasingly furnished to a high standard and equipped with expensive flat screen televisions and accessories such as hot tubs and home gyms.

Loss of rental income

A quality Holiday Home Insurance policy should provide cover for loss of rental income, for insured perils which consequently render the holiday home uninhabitable for a period during which the property is repaired. As it may take some time to rebuild a holiday home levelled by fire or damaged by flooding; cover should be considered for up to two years. Check that your loss of rental income sum insured is sufficient and that your projected gross holiday letting income does not exceed the cover provided.

Should you require any additional guidance or a holiday home insurance quote, please contact a member of Boshers Holiday Home Insurance Team on 01237 429444.

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Part 4 – Guide to Holiday Home Insurance – Contents Insurance

Contents Insurance

In Part 4 – Guide to Holiday Home Insurance – Contents Insurance we discuss the contents of your holiday home. The very nature of a holiday home is that it is a `home from home’ and therefore let on a fully furnished basis. In the past it was not unusual for the value of a typical holiday home contents to be relatively meagre. Latterly as people’s expectations have risen, as has competition within the holiday home market, it is has become the norm rather than the exception that an owner spend tens of thousands of pounds furnishing their holiday home. LCD and Plasma TV screens, surround sound home entertainment systems, hot tubs and expensive garden furniture are becoming increasingly more common.

A holiday home insurance policy with contents cover on a new for old basis will provide you with the peace of mind that your property is protected. The sum insured should be adequate to cover the replacement value of the contents in total. It is advisable for owners to complete an inventory of contents together with photographic evidence and schedule of values in case of a total loss. A tip for photographing your audiovisual electrical equipment is to also take a shot of the serial number, which can aid identification and recovery in the event of theft. 

Check out the following posts which expand on Boshers Guide to Holiday Home Insurance or visit our Holiday Home Insurance page.

1. Guide to Holiday Home Insurance – Property Owners Liability Insurance

2. Guide to Holiday Home Insurance – Employers Liability Insurance

3. Guide to Holiday Home Insurance – Buildings Insurance

5. Guide to Holiday Home Insurance – Loss Of Rental Income

6. Guide to Holiday Home Insurance – Legal Expenses

7. Guide to Holiday Home Insurance –  General Considerations

 

 

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