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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?
UnderinsuranceIt 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 CostsYour 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 linkingBecause 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 CalculatorYour 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 incomeA 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.