The Independent’s journalism is supported by our readers. When you purchase through links on our site, we may earn commission. Why trust us?

Holiday home insurance guide 2024

Want cheap home insurance? Compare quotes from over 60 top brands
In partnership with

A holiday home is usually a second property you and your family use for holidays, to let out to other holidaymakers or both.

Whether the property is your beachside bolthole or an Airbnb, it won’t be covered by standard home insurance. This is because it will be subject to different risks if it’s empty at certain times and inhabited by paying guests at others. 

You’ll need special holiday home insurance or “holiday let” insurance to protect a holiday home. This guide explains how this type of insurance works and how to get the best home insurance deal.

icons8-home-32

What is a holiday home?

A holiday home is a property you own that isn’t your main residence. As the name suggests, it’s used for holidays. The holidays may be taken by you, your family, friends, paying guests or a combination of these. 

There are special tax rules for rental income from holiday homes. HMRC refers to these properties as “furnished holiday lettings” (FHLs).

To qualify as a holiday let or FHL for tax purposes, your property must be:

  • in the UK or the European Economic Area 
  • furnished sufficiently for normal occupation 
  • commercially let to make a profit
  • available for letting for at least 210 days a year 
  • commercially let for at least 105 days a year

You are not obliged to let your holiday home to other people. You might just use it for holidays for yourself, family and friends and not try to generate an income from it.

What is holiday home insurance?

Home insurance for a holiday home is different from standard home insurance because the way the property is used differs.

With standard home insurance, you’ll generally live in the property yourself with other members of your household, and it will be your main residence.

No one will live in your holiday home full-time. You may use it regularly, but it might also often be unoccupied. Unoccupied properties are a bigger insurance risk than occupied ones. 

If you let your holiday home to paying guests, there are also extra risks, such as damage to the property or vandalism, or your guests might sustain an injury while staying in your property.

Specialist holiday let insurance ensures these extra risks are covered.

Buying the right insurance is important if you plan to let your holiday home as a business.

Types of holiday home insurance

There are various types of insurance for holiday homes. The main ones are:

  • UK holiday home insurance
  • Overseas holiday home insurance
  • Insurance for log cabins, seaside chalets and holiday cottages

UK holiday home insurance is probably the most straightforward. The right policy can protect your property and contents from damage from storms, excessive rainfall, burglary, leaks, floods, vandalism and even total destruction.

Overseas holiday home insurance is more complicated. Some UK insurers will only cover homes in certain other countries. For example, Towergate holiday home insurance is only available in the UK, Spain, France, Portugal, the Republic of Ireland, Greece and Southern Cyprus.

And even if the country where your home is located is covered, there may be different rules; for example, it might not be covered for earthquakes in regions where these are common.

You may be able to buy insurance in the country where your property is located, but make sure you understand what you are signing up for.

You can buy holiday home insurance for static caravans, log cabins, chalets and other non-standard homes. But the construction of some of these property types might mean you need specialist insurance. For example, log cabins are built using wood or timber or from a kit, posing certain insurance risks.

Compare Home Insurance Quotes
Compare quotes from over 60 top brands to find the best deal
GET A QUOTE
In partnership with MoneySuperMarket

What is holiday let insurance?

Standard holiday home insurance will be sufficient if you only use your second home for your own holidays or let friends and family stay there.

But if you also let your holiday home to paying guests, such as on Airbnb, you’ll need holiday let insurance.

This covers your home and possessions against the normal risks covered by home insurance but also the extra risks posed by guests coming and going for stays of various lengths.

This type of cover includes:

  • Accidental or malicious damage cover: covers damage by your guests and possibly their pets
  • Alternative accommodation: provides cover if your holiday home is uninhabitable and you can’t use it as planned or if you need to find somewhere else for guests to stay
  • Loss of rental income: provides cover if you cannot let your home as planned due to an insured event
  • Public liability insurance: provides cover if a guest takes legal action against you because they’ve been injured at your property
  • Employer liability: provides cover if you employ a cleaner or gardener to work at the property on your behalf
  • Legal expenses: covers the cost of any legal disputes that might occur with neighbours or guests who refuse to leave
  • Home emergency cover: covers call-out and labour costs to deal with boiler, heating, hot water and electrical issues
  • Hot tub, swimming pool and sauna: covers damage to these fixtures
  • Key cover: covers lost keys or locks that need replacing

Do I need holiday home insurance?

There is no legal obligation to take out holiday home insurance (or any other type of home insurance). But if you have a mortgage, your lender may insist you have buildings insurance. 

On the subject of mortgages, lenders won’t permit you to let your home as a holiday let on a standard mortgage – you’ll need a holiday let mortgage (which is different from a buy-to-let mortgage).

Despite not being mandatory, holiday home insurance is well worth having. For a relatively small outlay, you can protect your property for up to hundreds of thousands of pounds. 

Leaving a property unoccupied for long periods comes with certain risks. For example, you might not be aware of a leak that causes damage to your property. And empty properties are more likely to be broken into or targeted by squatters.

If you let your holiday home to paying guests, this also increases various risks. Without public liability insurance, for example, you could be sued for accidents in your holiday home, such as tripping on a loose carpet. 

Holiday let insurance covers a range of circumstances that could arise from running a holiday let business. 

If you use a holiday let agency to manage your holiday let business, you may be required to have insurance as part of the contract.

What does holiday home insurance cover?

There are two main types of holiday home insurance: buildings and contents (the same as standard home insurance). 

Buildings insurance covers the cost of repairing the structure of your property, fixtures and fittings if they suffer damage. It would pay out to repair and replace your water pipes if they burst, for example, and cover the damage caused to the structure of your property.

Contents insurance covers the belongings inside your home, such as furniture and possessions. If you rent out your holiday home, you’ll probably kit it out with furniture and appliances such as a coffee machine, toaster and air fryer; it’s important these are insured, as they’re fairly easy to steal.

You can buy buildings and contents insurance together or separately.

If you let your home, you can include holiday let insurance to cover the added risk posed by paying guests (as explained above). 

What is not covered by holiday home insurance?

Things that are not covered by an insurance policy are known as exclusions. Common exclusions on holiday home insurance or holiday let insurance include:

  • Extended lets (check your policy; some have a 31-day maximum)
  • Stag and hen parties
  • Properties with more than seven bedrooms (even if they’re not all used)
  • Homes with non-standard construction (you need specialist insurance for these)
  • Damage by guests’ pets
  • Theft by paying guests

What optional extras should I consider for holiday home lets?

If you let your holiday home to other people, you’ll benefit from extra cover for the risks to your property, your income from the property, and your guests.

Optional extras available include:

  • Emergency travel cover: If your holiday home is damaged or there is an emergency event (e.g. a burglary), you may be able to claim back the cost of travel to inspect the damage, deal with the emergency or both 
  • Theft by paying guests: Cover for property stolen by guests or visitors where there is no sign of forced entry is often excluded by holiday let policies, but you can usually include it as an optional extra
  • Malicious damage: Malicious damage is usually defined as intentional destruction or defacement of property and includes vandalism, trespass, smashed windows and fly-tipping. This kind of damage can be caused by guests or passersby

How much does holiday home insurance cost?

As with home insurance, the cost of holiday home insurance can vary greatly, as premiums are based on several factors.

These include:

  • location
  • construction
  • type of property (e.g. house or log cabin)
  • property value
  • rebuild cost
  • contents value
  • how often the property is occupied/let

Insurance costs will be tax-deductible if your property qualifies as an FHL with HMRC. 

How to get cheap holiday home insurance quotes

The number one rule for finding cheap holiday home insurance is to use a price comparison site to shop around and compare quotes from different insurers.

You can generally save money by:

  • Paying annually upfront: if you pay in monthly instalments, you’ll usually be charged interest
  • Buying buildings and contents insurance together: a combined policy is usually cheaper than buying buildings and contents insurance separately
  • Making your holiday home secure: smart tech (e.g. for detecting leaks), a burglar alarm and good door and window locks could help you get cheaper cover
  • Not claiming: you can build a no-claims discount on holiday home insurance in the same way you can with other insurance policies
  • Increasing your excess: this is the amount the policyholder pays towards any claim

Holiday home insurance FAQs

No. Standard home insurance isn’t suitable for a holiday home; most policies won’t cover homes that are unoccupied for more than 30 or 60 days and won’t include cover for paying guests or protection against lost rental income.

This depends on the policy. Some policies stipulate that certain conditions must be met if a property is unoccupied for longer than 30 or 60 days. 

For example, you may need to document regular checks on the property, switch off the utilities or drain the water system.

Buildings insurance should cover the rebuild cost of your property. This differs from the market value; your insurer can help you work it out.

 

How much contents cover you need depends on the value of the furniture, electrical appliances and other contents in the property.

Most policies offer buildings cover up to £1 million and public liability insurance up to £5 million.

emma lunn

Emma Lunn

Money Writer

Emma Lunn is a multi-award winning journalist who specialises in personal finance and consumer issues. 

With more than 18 years’ experience in personal finance, Emma has covered topics including mortgages, first-time buyers, leasehold, banking, debt, budgeting, broadband, energy, pensions and investments. 

Emma’s one of the most prolific freelance personal finance journalists with a back catalogue of work in newspapers such as The Guardian, The Independent, The Daily Telegraph, the Mail on Sunday, and the Mirror. 

As a freelancer she has also completed various in-house contracts at The Guardian, The Independent, Mortgage Solutions, Orange, and Moneywise. She also writes regularly for specialist magazines and websites such as Property Hub, Mortgage Strategy and YourMoney.com. 

She has a real passion for helping people learn about money – especially when many people are struggling to get by in today’s challenging economic climate – and prides herself on simplifying complex subjects.