Premium prices for holiday home insurance

A home away from home is seen as more prone to theft and damage, writes Laura Slattery

Holiday homes are supposed to be the perfect hideout, a regular getaway spot for weary urban workers who want to relax in the comfort of their own "home away from home".

But spending five hours negotiating potholed back roads and refamiliarising yourself with the quirky local signposting only to discover that the front door of your dream country cottage has been smashed in isn't the best start to any weekend break.

Neither will it be much fun if the collapsed roof has left debris all over your double bed, nor if you find that a seemingly innocent nearby stream has suddenly swollen into a burst river and transformed every square foot of your wooden floors into a soggy habitat colonised by mossy, slimy life forms.

This is where insurance companies can step in and help you mop up the mess.

Cover doesn't come cheap, largely because holiday homes are judged to be more prone than main residences to the twin party-spoilers of unwanted human interference and acts of God.

As they are usually left empty for long periods and tend to be located in sparsely populated areas near the coast, they are vulnerable to both theft and damage from natural disasters like storms and floods.

If you have borrowed the money to pay for your bijou bungalow by the beach, then your lender will require you to take out a holiday home insurance policy.

It may even have referred you to a company willing to take on the risk.

But the lender's policy of choice might not necessarily be the cheapest or the best cover available.

A lot of insurers will only quote for holiday home insurance if they also insure the owner's main residence, or, in the case of Bank of Ireland, provide the mortgage needed to buy the holiday home.

Only Axa, Allianz and a Lloyd's syndicate policy sold and distributed by Donegal-based brokers Hickey Clarke & Langan will quote for the cover on a standalone basis.

The table opposite shows the typical cost of cover from a selection of insurers for holiday homes in four popular getaway locations - Wexford, Galway, Kerry and Donegal.

Lovers of the Connemara landscape should take note that three of the insurers charge more for holiday homes in Co Galway than they do for any of the others.

The Lloyd's policy as sold by Hickey, Clarke & Langan is the cheapest standalone cover available.

FBD is the cheapest among the insurers who only quote if they also insure the main residence. Past surveys by The Irish Times have found that the company generally offers quite competitive premiums on main residences.

However, if the discounts available for a three-year claims-free period and fitting a burglar alarm are taken into account, the Hickey Clarke & Langan Lloyd's policy is still the cheapest overall for holiday homes.

It is also the only policy that will insure thatched cottages.

Holiday homes demand a little loving care and attention. If they are simply abandoned for 11 months of the year, the insurance company may not pay out if something does go wrong.

One trap that a lot of holiday home owners fall into is ignoring a condition in the policies known as the unoccupancy clause, says Mr Joe Langan, adviser at Hickey Clarke & Langan.

Insurance policies do not all provide the same level of cover, meaning consumers should not simply compare them on premiums alone. For holiday home insurance, the main differences revolve around insurers' treatment of this clause.

The unoccupancy clause dictates how homeowners should manage their property during the winter months, usually kicking in on November 30th and applying until March 31st.

The clause requires owners to either turn off the water supply at the mains and drain the system or leave the heating on permanently at a temperature of at least 10 degrees.

"If the pipes freeze and the owners have not complied with the unoccupancy clause, they can get badly caught out," Mr Langan says.

Under the Lloyd's policy, homeowners can install a small thermostat device known as a "frost stat" that activates the heating system when the temperature drops to four degrees.

Security issues will also be to the forefront of underwriters' minds.

Insurers often refuse to cover valuable items such as art and jewellery. "It's not a huge issue because most holiday homeowners wouldn't have those things lying around, but it might affect you if you had some originals hanging on the wall," says Mr Langan.

If owners let out their holiday homes, they should make sure to advise the insurer so that the public liability section of the policy is extended to protect the owners from being sued if the tenants are injured while on the property.

Most insurers will restrict theft cover to losses as a result of forcible entry if the property is let, Mr Langan adds, "for the obvious reason that if you put a tenant in, the tenant can disappear off with all the contents".

Insurers will also require homeowners to appoint a caretaker to check the premises at regular intervals at least once a week.

Commercial companies such as Irish Home Minders will provide a professional service for a fee, but an arrangement with any "responsible person" who is a keyholder will normally satisfy insurers, Mr Langan says.

"There may be a permanently occupied residence down the road. The holiday homeowners become friends with them and enter into a casual arrangement whereby they will keep an eye on the property when they're not there. Insurers by their nature like the idea of a commercial arrangement, but they don't insist on it."

It's not just affluent mini-breakers with second properties who have to figure out the vagaries of unoccupancy clauses and security rules.

"Irish people who are working abroad might have a place here which is technically a holiday home because they might only spend a few weeks in it," explains Mr Mike Brown, director at Kidd Insurances in Dublin, which distributes the Axa policy.

"The place might become their family home eventually, but in the meantime they can't get full cover on the home as their main residence," he says.

So what about people who prefer to own second properties in spots where the monthly rainfall figures are ever so slightly lower than on the Irish coast?

"Some people sort it out on the local market in Spain or France or wherever and take their chances," says Mr Seán Burke, managing director of Burke Insurances in Galway.

But most prefer to avoid the hassle of having to interpret policies written in a foreign language, deal with non-English speaking loss adjusters and settle claims in overseas jurisdictions, he adds.

Up to this month, policies written in English had to be bought through the UK, with the premiums and claims awards in sterling and liability cases subject to English law.

However, Burke Insurances has now developed an insurance product specifically for Irish owners of overseas holiday homes that is priced in euros and subject to Irish law.

The cover is available for properties in France, Italy, Spain, Portugal, Greece and Monaco, whether they are owner-occupied, let out or used by family and friends.

Of course, no amount of insurance will prevent holiday homes being ravaged by all kinds of disasters.

But at least the thought that their place in the sun can be reinstated to its former glory without putting them out of pocket will provide some solace to holiday homeowners, perhaps as they indulge for once in the responsibility-free confines of a hotel.