How not to let your holiday home dream go up in flames
Anyone who saw the flames tearing their way through more than 70 houses in St Francis Bay couldn’t fail to be horrified.
Whilst some of the properties were occupied, many of the properties caught in the blaze were holiday homes and unoccupied at the time. For those owners, suffering such a heart-breaking loss could also become a huge financial loss if they didn’t have proper holiday home insurance cover, or failed to make sure they knew about any exclusions within their policy.
“By far the most important piece of advice we give our clients, regarding their holiday home insurance,” reveals Joe Szemerei, executive head of Indwe Risk Service’s Direct division, “is to treat it in exactly the same way as their primary residence.”
Out of sight, out of mind can often apply to holiday homes – when they’re not being stayed in, they’re often not thought about.
“All insurance policies have exclusion clauses,” Joe explains, “and the big one for holiday home owners is to ensure they have made the insurer aware of the period of time the property is normally left unoccupied for.
An unoccupied property presents a higher risk to the insurer, so a higher tariff may be required, which is why they want to be made aware this. It’s important to keep in mind that these tariff ‘loadings’ are negligibly small in comparison to the potential loss that a policyholder can experience – this is not the time to be penny-wise!”
Szemerei advises holiday home owners, whose properties are going to be left empty for long periods of time, to consider adding vacant property cover to their policy.
Of course, rogue fires jumping from house to house due to high winds are unusual. There are many more common causes for holiday home insurance claims and a few exclusion clauses to be aware of.
Burst geysers, storm damage, roof leaks, electrical fires, pest damage and infestation have all been cited in holiday home claims. Szemerei continues: “Even if the owner has vacant property cover, damage resulting from a lack of property maintenance can cause insurance claims to be rejected.”
It’s not just the bricks and mortar of holiday homes which require protection – the contents of holiday homes are equally vulnerable, not just from water or fire damage but from theft and vandalism.
Security systems are essential and most policies will insist that alarms, gates and electric perimeter fences are registered, under warranty and regularly serviced. “Failure to do this,” warns Szemerei, “can leave holiday home owners with an insurance policy that won’t pay out in the event of a break-in.”
Going further still, even though owners may have contents insurance as part of their holiday home insurance – which generally covers furniture, appliances and other electrical equipment and interior decoration – many policies don’t include insurance provision for personal effects and valuables such as jewellery, mobile phones and laptops under the Contents Section of the policy. These quite often have to be specified under the All Risks Section – it is vitally important that policyholders discuss this with their broker.
It is also critical to ensure you aren’t under-insured in respect of your buildings or contents and that your insured values cater for a total loss, as was experienced by those unfortunate owners affected by the devastating fires in St Francis.
Szemerei also raises the issue of holiday home rentals, or having family and friends stay in your property: “Some residences are only ever occupied, by their owners, for a few weeks every year; others have family and friends who stay in them at various times too, and plenty of owners rent their properties to holiday makers.
It’s imperative that owners renting out their properties make sure they have legal liability provision, as part of their insurance, to cover the cost of any injuries sustained by guests caused by the property; cover can also be included to cover the costs of any legal disputes which may arise as a result.
Protection against damage to your property, caused by your guests, is also something that needs to be considered.”
It’s clear that standard, bare minimum household insurance isn’t going to provide sufficient cover for holiday homes, their contents, owners and any guests. Every holiday home is different; the lifestyles of each owner, contents left in the property, intended frequency of use (and by whom), and other relevant factors, vary massively.
Szemerei concludes: “With so many variables, and in light of the fires at St Francis Bay, holiday home owners should read through their existing policies very carefully. Then, if they’re not properly covered or are unsure, talk things through with a broker who can offer advice and tailor-make a policy to suit their specific property and individual needs.”
Being proactive about your holiday home insurance and making sure you’re fully covered is not only sensible – after all, you’ve invested a lot of money in your getaway property – it will give you peace of mind, knowing everything will be taken care of should something happen.