If you own an overseas property either for leisure or investment purposes, it makes sense to insure it. Imagine if you had guests who leave the bath running in your Spanish apartment and caused a flood - or a hurricane hit your Caribbean villa?
Standard UK home insurance isn't normally suitable as it typically excludes cover when the home is left unoccupied for more than 30 days or whilst being let out. Certain countries charge if a fire brigade attends a property, which is additionally not covered under a UK policy. It is a condition of a mortgage that you take out buildings insurance, but you should seriously consider taking out cover even if you own your home outright. Buildings insurance should reflect the cost to rebuild your home including any outbuildings and/or swimming pools.
Don't assume that insurance policies overseas work in exactly the same way as they do here, says the Carroll Insurance Group
Contents insurance is essential to protect your furniture and possessions and should be insured for the cost to replace the items as new. Careful consideration should be taken before you purchase holiday home insurance as these properties are subject to additional risks to those of your main home in the UK.
They are likely to be unoccupied for indefinite periods, so you need to take adequate precautions to protect them. In addition to fully lagging the pipes, in the winter months you will need to ensure that the home is also adequately heated to alleviate burst pipes.
Holiday homes are more of a target for thieves so having adequate security installed is essential. The minimum security requirement in the UK is that 5 lever mortice dead locks are installed on all external doors and key operated window locks on all ground floor and vulnerable windows. Most insurers will recommend that the equivalent is fitted on an overseas home.
6 Questions to Consider When Getting Insurance Overseas:
Q: Do I have to arrange insurance cover with an insurance company that is based in the country my property is situated?
A: Certain countries require you to insure with a local insurer, but the majority allow you to arrange cover with a UK insurer, as long as the insurer is licensed in the country concerned.
Q: Will the cover provided be broadly the same as offered in the UK?
A: That depends on the provider you choose. Most UK insurers limit cover on overseas homes and exclude cover like accidental damage, subsidence and earthquake. You need to check your wording carefully for any limitations or exclusions.
Q: Are my personal valuables and possessions covered whilst I am staying in my holiday home?
A: Holiday home insurance does not normally cover valuables and possessions. However, comprehensive UK home insurance policies should cover these items whilst you are travelling abroad. If yours doesn't then you might wish to consider looking for an alternative provider.
Q: Are any specific restrictions applied to my overseas home?
A: This depends on where your home is situated. Earthquake and subsidence cover may well be excluded entirely or restricted to certain countries. You will need to check with your provider.
Q: Are there any areas of the world that I will not be able to arrange insurance cover?
A: Yes, you will find it extremely difficult to arrange cover in any country that is at war or deemed unstable.
Q: If I let my home out would I automatically be covered if someone in my property had an accident and took legal action against me?
A: No, most standard policy wordings exclude business use, which includes whilst being let. However, the option to add this cover should be available. You will need to check this with your provider.
Find out more by visiting our dedicated overseas property insurance page.
(This article was first published in the current A Place in the Sun magazine - Summer 2015 issue 122)
Caroll Insurance Group