15/01/2019
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Holiday Home Insurance - your questions answered

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The purchase of any property requires a great a deal of research and consideration, not to mention the mixed emotions of stress and excitement. The purchase of a holiday home is no exception but, because it is to be used for relaxation and enjoyment, there is perhaps a greater anticipation of fun times ahead.
With any purchase there comes the boring, but essential stuff and, falling under that heading comes insurance.
To make the process easier, we asked Paul Baker, of Paul Baker Insurance Services (PBIS), to respond to the most commonly asked questions about leisure home insurance. PBIS is an independent insurance intermediary specialising in leisure home/lodge insurance and park homes. The company’s polices are underwritten by AXA Insurance UK plc.

 

Q THE PROPERTY I AM THINKING OF BUYING IS NEAR A RIVER. IS THIS A CONCERN?
A Many holiday homes are on parks near to a river or the sea, so the risk of loss or damage by flooding can be a concern. It obviously helps that these properties are raised off the ground BUT, before committing to the purchase, you would be well advised to check that you can get insurance to cover flooding.
All insurance companies have extensive flood data, meaning that they can quickly underwrite the risk. This data will vary from insurer to insurer so, whilst one may exclude flood damage, another may not. Some may apply a condition that the home is fitted with a flotation device which means that, in the event of flood conditions, the home will rise and fall with the water level but remain dry!  Insurers will take a different approach depending on the post code. Some will provide full cover; others will exclude altogether; others may apply a flood excess and some may apply a premium loading, so it is well worth shopping around.

 

Q WHAT ABOUT PROPERTY IN THE OPEN?
A Policies are likely to include an element of cover for possessions in the open, such as patio and garden furniture, garden statues and pots and BBQs but a limit will apply, typically anything from £250 to £1000, or possibly more.

 

Q I AM CONSIDERING USING A HOLIDAY HOME AS MY MAIN RESIDENCE. IS THAT A PROBLEM?
A It could be!  Holiday parks are licensed for leisure-home use but the length of the licence will vary from park to park. Some offer a 12-month licence; some are much more restrictive. Holiday parks are NOT protected by the Mobile Homes Act, so there is little security of tenure. You will have a licence to occupy for a limited period which may be 10 years but could be a lot longer. You will not, however, be allowed to live there forever.
You may also be required to vacate the home for a defined period. You should VERY carefully read the terms of the licence to check the occupancy rules. For example, if you sell the home you will probably have to pay at least 10% of the proceeds to the park owner. Holiday parks will usually require evidence of an alternative main residence and will often not accept mail.
PBIS is able to offer cover for holiday homes which are occupied as a main residence. Other insurers may not. It is important to be clear about your circumstances to ensure you purchase a policy which meets your requirements.

 

Q WHAT HAPPENS IN THE EVENT OF AN EMERGENCY?
A Some policies include a ‘Home Emergency Assistance’ service which means that, in the event of a qualifying emergency, a tradesman will be despatched to deal with the emergency and the policy will cover the cost of the call-out up to a certain limit.
Typically, qualifying emergencies will include complete electricity failure, central heating or boiler failure, vermin infestation, blockages in toilet pipes, broken or damaged windows, doors and locks presenting a security risk to the property and plumbing problems related to leaking pipes, blocked drains or leaking radiators.
Conditions will usually apply. For example, the boiler may have an age limit and be subject to an annual inspection. The ‘Select’ policy from PBIS includes this cover with a £500 benefit limit, with a maximum of three claims per policy year. The ‘Economy’ policy does not include this benefit.

 

Q TYPICALLY, WHAT TYPES OF LOSS OR DAMAGE AM I INSURED FOR?
A Cover will vary, which is why it pays to speak to a couple of insurance providers. Essentially, however, polices should cover a wide range of perils including loss or damage caused by fire, explosion, lightning, earthquake, flood, storm, escape of water or oil, subsidence, theft or attempted theft, impact by road vehicles, falling trees and branches, breakage of satellite dishes, solar panels and TV aerials, malicious damage/vandalism, accidental breakage of sanitary ware, ceramic hobs, fixed glass in doors, windows, fanlights and conservatories and accidental damage to underground drains, pipes or tanks providing services to the home for which you are responsible.
Additional covers will include replacing keys and locks following the theft of keys, and wider cover in respect of accidental damage such as spillages on carpets and upholstery, damage to work tops and ornaments.
Loss or damage caused by vermin such as mice and rats is something to be aware of, particularly as holiday homes are often in rural locations and are unoccupied for long periods. The ‘Select’ policy from PBIS includes cover for such damage; the ‘Economy policy excludes it. Cover will be on a new-for-old basis, but some policies will only include indemnity or market value cover on clothing and bedding.

 

Q HOW MUCH SHOULD THE HOLIDAY HOME AND CONTENTS BE INSURED FOR?
A You should be looking for a new-for-old policy, meaning that, in the unlikely event of a total loss, following a fire for example, the home can be replaced with its brand new equivalent. This would include the additional costs of site clearance, re-siting and delivery fees, the replacement of any outbuildings such as sheds and storage boxes and any additions such as decking. In the event of a total loss the replacement home can only be purchased via the park and not direct from the manufacturer; it can therefore be difficult to calculate how much to insure for, but the park will be able to help.
However, many policies take away the worry of being under-insured by offering what is called a ‘blanket’ sum insured. At PBIS, for example, the company’s ‘Select’ policy includes a property sum insured of up to £300,000 which should be more than enough to replace the vast majority of  holiday lodges and leisure homes. And PBIS’s ‘Economy’ policy includes a sum insured of up to £150,000 which is ample in many cases.
Referring to contents, which are essentially furniture, electrical items, floor coverings, crockery/cutlery and bedding, these can be insured for a value you consider to be appropriate to replace these items as new. Again, some policies will include a ‘blanket’ sum insured; at PBIS it is up to £30,000 on the ‘Select’ policy and up to £15,000 on the ‘Economy’ policy.

 

Q WHO ARRANGES HOLIDAY HOME INSURANCE?
A Because holiday lodges and leisure homes are built on a chassis and predominantly of timber, they are regarded by most insurance companies as ‘non-standard’ construction. For this reason traditional insurers, such as the ones which insure your main residence, are unlikely to be able to offer cover. There are really two options. Firstly, a specialist insurance intermediary such as PBIS which will offer a bespoke policy specifically designed for such properties. They will tend to look after all aspects of the policy from quote to policy issue, from renewals to claims. And secondly, many parks offer their own schemes which will be managed by them or by a specialist insurance intermediary on their behalf.
Whilst parks offering their own schemes sounds quite an attractive and easy option, it is certainly worth getting alternative quotes to compare both the levels of cover and price. You are not obliged to insure through the park but they are allowed to charge a modest fee, around £25, to check your policy to ensure it meets their minimum requirements.

 

This article hopefully provides the answers to most of your questions, if you have any further questions by all means email Paul at [email protected] or speak to your own insurance advisor.

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