Understanding Insurance

Your guide to holiday home insurance

Having an overseas abode in a popular holiday destination is an exciting prospect. Whether it’s a long-term investment, extra source of income or a seasonal retreat you’ll need to get it covered. Holiday homes require specialist insurance since they’re subject to different kind of risks that aren’t covered in traditional home insurance.

At Dial Direct, we’ve written a handy guide to help you understand the differences.

What is holiday home insurance?

For a quick introduction to holiday home insurance, watch our video guide:

Holiday home insurance covers the events unique to a second property which could pose as a risk. For instance, the home is much more likely to be unoccupied for long-periods of time, this could expose the property to a higher risk of theft or damage, since problems could go unnoticed for longer and worsen. Conventional home insurance typically covers unoccupied homes for a maximum period of 30 days.

Like standard homeowner’s insurance, your holiday home insurance is split into contents and buildings insurance.

Buildings will cover the property’s structure and permanent fixtures against all the typical risks including natural disasters, subsidence, while contents cover will protect your possessions against fire, theft and other hazards.

The process for working these out is the same as your standard home insurance. Let your provider know the estimated cost to rebuild the property and value of contents.  The rebuild cost is how much it would cost to rebuild your property entirely from scratch. The best way to find this out is to hire a surveyor, for overseas properties your lawyer who worked on your property purchase can advise on where to locate one in the area.


Insurers can provide a range of add-ons you may want to consider when purchasing cover and it’s useful to be aware of them so you know what to look out for. Two common options include:

Travel emergency – In the case you need to make a claim for your holiday home, you’ll receive the cost of any emergency travel that’s required.

Temporary accommodation – If your property is made uninhabitable by an event covered in your policy (such as fires or floods) this add-on covers the cost of putting a roof over your head while the repairs are happening.

How do I purchase holiday insurance?

Getting covered overseas isn’t particularly different to the process of getting insurance in the UK. Many UK providers specialise in holiday home insurance for overseas properties and if you find firms don’t offer a service for the country your property is in, overseas providers often offer assistance and policy documents in English.

Do I need holiday home insurance if I rent out my property?

As with traditional home insurance, you’ll need to get another type of insurance to cover the risks that come with letting out a property. While some holiday home insurance includes policies for rental properties such as loss of income as standard, it’s essential to check they include all the cover you need as a landlord. If they are not bundled, you may need to get landlord insurance.

What to consider when buying a holiday home

An overseas property is a significant financial investment and whether you’re looking for another source of income or regular place to relax where the climate isn’t so temperamental, there’s a lot to think about. Here are some top tips to consider when purchasing a holiday property.

The climate

The weather in the UK can be nothing short of dismal when it comes to summer, so a hotter climate often tops the list of holiday requirements for Brits.

In 2016, property website Rightmove reported that Spain gets a staggering 2.5m property searches per month and receives 11 hours of sun per day during July and August compared to the UK’s 6, one of the reasons it’s such a popular location for British holidaymakers. Portugal was also popular with just under 550,000 property searchers per month and 12 hours of sun per day in July and August.

Is the location suitable for letting?

Check if there is demand for holiday homes in the area you’re looking at and whether the supply is meeting this. Going too rural could limit your market and you may struggle to attract holidaymakers.

Are their suitable facilities nearby for both children and adults? While being close to a beach is desirable, being near places like shopping centres, supermarkets, restaurants, bars and supermarkets really makes a property more attractive for prospective renters.

Transport links

How well-connected is the property and is the public transport frequent and reliable? This may not be necessary if you are purchasing the property for leisure, but as a buy-to-let investment, well-connected homes are more enticing and gives you a wider target market.

Return on investment

While your holiday home may be for an escape to a sunny climate and for your personal enjoyment it’s a significant financial investment. It’s wise to research what the property market is like in your prospective destination, what changes have house prices experienced in previous years, and what’s the demand like for properties in the area.

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