No matter how you use your home, it’s important that you’ve got the right insurance cover. Whether you live there permanently, use it as a holiday home or rent it out to other holiday makers, make sure you find a policy that suits your needs.
Your home insurance should cover you for when you’re there, but even more importantly, when you’re not. Here’s a few tips to help you to find the right home insurance cover for your holiday home.
Insuring your holiday home
Your needs change depending on how you use your holiday home, which means that your insurance should be flexible enough to cover you no matter how you use your second abode.
Do you keep your holiday home exclusively for your use?
If your holiday home is for your use only, then building and contents insurance is what you need. While these policies often work the same way as they would for a residential home, there are a few points that are worth being aware of, so you don’t get caught out.
Do you only stay at your holiday home for a few weeks throughout the year? If your holiday house is left vacant for extended periods of time then you might not be covered or you may have to pay an additional unoccupied excess if an insurable event occurs. Check your PDS to see what you’re covered for if the house is unoccupied.
As a policyholder, it’s also important to know what your responsibilities are. Does your PDS list your responsibility to report an insurable event as soon as practically possible? This could get tricky if you’re only at your holiday home every once in a while. In some cases, if further loss or damage occurs because of delayed reporting there’s a chance that the additional damage won’t be covered under your insurance. If your holiday home is left vacant for extended periods it could be worth having a plan in place to make sure the house is monitored when it’s unoccupied.
All insurance providers and policies are different, so make sure you read up on your PDS to know exactly what it includes.
Do you lease your holiday home to other people?
Taking out building and contents insurance for a holiday home is all well and good if it’s for your use only, but it often doesn’t work the same way if you’re leasing your home out to holiday makers. Other exclusions may apply if your property is used for short term rentals like Airbnb or Stayz, so check your disclosure statement to see how your policy works.
If you’re renting your holiday home out or plan on leasing it in the future, here are a few questions worth asking to figure out if you’ve got the right insurance:
- Does your insurer cover your building and contents if it is rented out?
- Does your insurance offer an option for lessee/tenant damage or do you need specific landlord’s insurance or even a policy explicitly tailored to short term Airbnb type rentals?
- Does the PDS for your policy require you to use reasonable care in selecting tenants?
- Does your insurance require you to have regular internal and external inspections of the property (e.g. every 3 months) and to keep a record of the inspections?
To find out whether you're covered for lessees or tenants, check your insurance PDS. You may need to take out specific landlord insurance or notify your insurer that the property is leased or risk having to foot the bill if your claim is denied.
Things to watch out for
Just like your regular home, your holiday house also needs regular maintenance and TLC to keep it in shape.
If you’re not at your holiday home regularly it could be worth getting a property manager to pop in from time to time to check that everything is in working order and organise routine maintenance. This includes anything from gardening and mowing, to making sure the building is structurally sound and cleaning the gutters.
When things change around the house so should your insurance. This also applies to your holiday home. If you’ve made any upgrades or have splurged on some brand new furniture or electronics, let your insurer know so that your policy can be updated to keep you covered.
Choosing the right insurance for your holiday home depends on whether it’s for exclusive use or rented out. Get to know the ins and outs of your policy by reading the PDS to make sure you're covered in the case of an insurable event.
Keen to find out more about Youi’s home insurance offerings for your holiday home? Check out our range of home insurance offerings.
The information provided in this article contains general advice only. It has been prepared without taking into account any person’s particular objectives, financial situations or needs. Product issued by Youi Pty Ltd. Consider our home insurance product disclosure statement and target market determination at www.youi.com.au when deciding whether our products are appropriate for you.
