Insuring Your Holiday Home Abroad – An Owner’s Guide

By Matthew Mullee, Insurance Adviser, Partners&

After years of gazing into the windows of local estate agents, you are finally ready to take the plunge and buy your first holiday home abroad. Congratulations (and when can we come and stay?!).

Before you get carried away selecting poolside furniture and planning a kitchen extension, we need to talk insurance. (Also known as peace of mind.)

As with any large purchase, and particularly with a property abroad, you need to choose your holiday home insurance with care, so that if the worst does happen, it doesn’t totally ruin your slice under the sun.

For example, if a pipe bursts, flooding your villa, the last thing you want is to be calling the local insurance company only to find they’re off for four days (because it’s a national holiday you had no idea about) and your language skills don’t stretch to understanding the message on their answer machine. For your own peace of mind, talk to a UK adviser to insure your new home abroad.

Seven things every potential European holiday home purchaser must know

Before we give you a list of things you must look for in your new home insurance policy, let’s run through a few facts you may not be aware of and that might make you ask a few more questions before you sign on the dotted line. For instance, did you know:

1. If you take out a ‘local’ insurance policy abroad, do not expect ‘subsidence’ to be covered as standard. You can add it on as an extra but it is not generally part of foreign insurance policies, due to the high occurrences of the problem in certain countries. Not limited to just local policy, UK policies may also exclude subsidence cover in certain circumstances.
2. Parts of Italy and Portugal and considered ‘earthquake zones’ so you may struggle to get insurance in some areas.
3. In Spain, the Government ask homeowners to pay into a ‘Conscorio’, a mandatory contribution fund, to help with the cost of natural disaster events such as fires or floods. This is paid as part of the insurance policy premium.
4. In France, due to the large amounts of natural disasters (fire, flood, etc.) certain areas have been designated as ‘zones’, with tough planning restrictions. If the property you wish to purchase is in a ‘Zone Rouge’[i], be aware that should it be destroyed, there is a chance you will not be allowed to rebuild it; in a ‘Zone Bleu’ you may be able to rebuild but subject to conditions. Obviously, insurance will be more expensive for these properties or simply impossible to get. Check with the local authorities to determine if your desired property falls into one of these zones.
5. In France, when your property is measured for insurance purposes, it will include all patio and outdoor spaces.
6. You will be required to pay different insurance taxes in different countries.
7. Post-Brexit (not Covid), the maximum stay in any European country is 90 days in any 180-day period – make sure you plan trips home regularly to stay within the law.
   
   If you have questions about specialised holiday home insurance contact our partner Partners&.

What to look for in a home insurance policy

Now that you’ve found a property abroad that you love, you’ll no doubt hope to visit a few times a year, lend it to friends and family and maybe even retire there eventually. Before you start packing your bags, let’s look at what you’ll need in your insurance policy.

Work with an experienced adviser

Firstly, it’s important to consult an experienced insurance adviser to get your holiday home insurance. They’ll talk you through the property in detail and the way you intend on using it. Buying off the shelf on the internet means your purchase is ‘non advised’ and if you later find out you are not covered for something crucial, you’ll have no course of redress.

You may not need a separate policy

Do I need a separate insurance policy for my holiday home abroad? The short answer is no, it can be added to your existing home and contents insurance policy. However, there may be local in-country circumstances and regulations where you do need a separate policy. Your insurance adviser will advise on this.

Consider where you get your policy from

What is the benefit of getting my holiday home insurance policy in the UK? Generally speaking, language and understanding. Your UK policy will be written in English and when you make a claim, you’ll be dealing with English speaking people, so there won’t be any language barriers. During working hours, Partners& clients come directly through to our UK-based claims department to talk to our highly experienced staff. You could get Jean who’s been with us for 25 years. In a worst-case scenario if your claim is substantial and we can’t cover it with a video call, we’ll fly our own loss adjustor out to see the damage.

With a locally purchased policy, if you need to make a claim when you are not in residence, the insurer may require the claimant to be present during the inspection.

Opt for all risks cover

Your insurance adviser will be able to assess your needs and requirements, present a range of options to you and advise you on what they believe is the most appropriate policy for you.

Make sure you tell your insurer if you plan to rent the home out

Yes, you need to let your insurer know, but don’t worry, it shouldn’t adversely affect your premium as properties that are well used are less of a risk than those left empty for long periods of time. If you are letting it out for ‘commercial gain’ you may also want to insure the rental income, in case the property is left unusable following an incident. If you are renting your property out, there may also be local requirement to have liability cover in place.

Be wary of being underinsured

We see a fair amount of water damage claims, particularly in apartments where the flat above has flooded, causing damage to our client’s property below. We also see claims for storm/flood damage in Spain and France where they experience some extreme weather conditions.

It is your responsibility to ensure that your property is insured for what it would cost to rebuild. Insurers can reduce the amount of any claim, by the percentage it is underinsured. For example, if your property is insured for £200k and you only insure it for £100k, the insured may only pay out 50% of the claim.

Why look for a holiday home insurance policy through Partners&

The Partners& Private Client team are personal insurance experts who will take the time to talk to you on the phone, to ask detailed questions and really understand your property. We’ll search the marketplace for the best options for you and present you with a short list, guiding you through them, pointing out the key points, making sure you understand every part of it and if you ever need our help to make a claim, our in-house team of professional claims advisers are here to help.

Partners& challenge the status quo by delivering insurance advice that makes a difference. Combining technical knowledge with service and intelligent use of technology, they offer clients the confidence and peace of mind that you are protected so with tailored recommendations that are right for you.