Buyer's Guide to property insurance

Friday, January 07, 2011

Buyer's Guide to property insurance

1. I've just bought a holiday home in Spain – what types insurance do I need for it, for complete peace of mind?

Just like in the UK, you will need buildings and contents insurance – even if your property is an apartment, as communal insurance will only cover the common parts of the blocks and usually nothing behind your front door. Some insurers, including Intasure, also include public liability insurance, loss of rent following a claim, emergency travel and accommodation as standard too. You may also wish
to add on accidental damage cover for family, friends and holiday tenants.

2. If I rent out my holiday home to holidaymakers, how could this affect my premium?

Aside from public liability, loss of rent, emergency travel and accommodation, the only extra is accidental damage, which covers spillage, breakages and human error, and this adds ten per cent to the premium.

3. What sorts of features of my holiday home will cause my insurance premium to be higher?

As an example, Intasure gives blanket cover of up to £/€1million on the buildings, but the premium is calculated on the type of property you have and the number of bedrooms. We will ask you if you have a private pool/hot tub, non-habitable outbuildings, or a conservatory. These all have an impact on the premium – so a studio apartment will cost less than a four-bedroom villa with a pool.

4. Does the cost of holiday home insurance vary much by country? Could you give a couple of examples of any specific insurance
laws or requirements that are particular to one country?

We have different rates for different countries but there is not a huge difference. When buying a property in France it is law to be insured at completion. Intasure will provide a schedule in French for this purpose. In Turkey it is law to have “Dask”, which is an earthquake tax.

5. Will my premium and insurance requirements be different if I let on a long-term basis?

No, essentially this is the same as holiday letting. However, if your property is in the UK and you let it out on a shorthold tenancy agreement you can take advantage of our landlord insurance. Otherwise we can provide a long-term let endorsement for all our other countries.

6. When it comes to choosing an insurer, are there any differences between using a local – to your overseas home – company and using a UK-based company?

Yes the language is one – using a UK company you can be sure you'll be dealing with English speakers. And the public liability limit is generally lower with local insurers – even in Spain it may only be €300,000 whereas Intasure provides £/€5million. Also, with UK companies, payment can be made in Sterling by interest-free direct debit, all your documents are in English, although for certain countries a schedule is produced in the local language. Really it's a question of peace of mind and being able to discuss any aspect of the cover in your own language.

7. Could you give some ballpark figures for the cost of annual insurance for some typical holiday homes:

- Three-bed villa with pool in the Costa Blanca with £10,000 contents and full accidental damage (a/d) cover: £306.67, or £281.51 without a/d.
- Three-bed villa (shared pool) in Fethiye, Turkey, with £10,000 contents and full accidental damage cover: £304.62, or £279.65 without a/d.
- Three-bed townhouse in the Algarve, Portugal, with £10,000 contents and full accidental damage cover: £229.49, or £211.35 without a/d.
- Two-bed ski apartment in the French Alps with £5,000 contents and full accidental damage cover: £182.41, or £168.55 without a/d.

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