Holiday Home Insurance - Overseas Local Covers

When you own a holiday home, you will want to make sure that you have the correct forms of insurance in force. If you buy the property in the United Kingdom, this is usually straight forward as most holiday home insurance policies, follow the format of standard home insurance in that they offer a similar range of perils. There may be one or two additions or restrictions, but the main , they are very similar. However, if you have bought a property overseas, there may there are some difference. In the main, insurance polices have been developed over the  years out of  necessity  and sometimes as a reaction to a certain event or series of event. In overseas countries, many of their holiday home polices have been moulded based on local events and needs.  If you purchase a property abroad you will need to make sure that you have all the correct forms of local covers.  If you buy your policy locally, you may find you have two problems: Firstly, the document may not be in English and  you may find it difficult to obtain a grasp of all the technicalities, secondly, don’t assume that overseas policies provided by foreign insurance companies will provide the same set of perils or limits of indemnity you would expect in the United Kingdom. It may be easier to source your overseas policy from the United Kingdom with a policy written in English and  be able to deal with staff that speak English.  The ability to discuss matters in your own language is best exampled by having to make a claim under a policy. This can be difficult at the best of time and often has to be conducted whilst you are away from the property. If you are dealing with English speaking staff, you will find this to be invaluable. Some examples of local covers are as follows:

In Turkey you must purchase a primary level of earthquake cover from the government, this is known as DASK. DASK is a compulsory earthquake insurance arranged by the Turkish Government. The level of cover will vary between areas and size of the property.  Everyone who purchases a house in Turkey is required to have  insurance which covers a percentage of damages in the event of an Earthquake. Some insurers now provide the basic DASK insurance from the UK, to obtain a quotation you will need to provide some extra information such as: 

Some United Kingdom insurers, subject to details of the property construction, may be able to provide additional cover beyond the limit of the DASk cover. ( it is usually to ask for the building to be constructed with a steel concert carcass)

In Spain, the government insist that polices contains a ” Consorcio” wording in accordance with the Spanish law dated 16th December 1954 which created the Insurance Compensation Consortium ( Consorcio de compensation de seguros). This has subsequently been altered by Royal decree. The purpose of the cover is to provide insurance against natural  phenomena of an extraordinary kind( such as a flood, earthquake, volcanic eruption, cyclonic storms, falling astral bodies or meteorites, terrorism, riots or uprisings and deeds of the armed forces or the security forces in peacetimes. A sum insured is provided with a compulsory excess, which is usually 10% of the loss. You are not allowed to insure the excess.

In France, you need to effect natural catastrophe cover in accordance with French Law 82-600 of 13th July 1982. The purpose of the cover is to provide insurance against pecuniary loss following an intense or abnormal event. As with Spain, there is a compulsory excess which you are not allowed to insure against. This excess in France does vary and is not fixed at 10%

As well of the above, certain countries have special requirements for the liability section of a holiday home insurance policy, in Spain for example  you will need to cover your legal liability as per section 1902 and subsequents of the civil code and and also subsequents of the criminal code, these place a demand on you for loss or damage caused to third parties but limited to events that occur within the holiday home. In  France, you are obliged to insure for the “Tenants Risk”, this covers the financial consequences of the liability which you may incur as tenant of the property in respect of material damage by fire or explosion under Articles 1382 to 1384 and 1732 to 1735 of the civil code. You are also required to provide cover for neighbours and third party risks under articles 1982-1384 of the civil code for any material damage to property of neighbours and third parties resulting from fire or explosion originating in the premises insured or containing the insured property.

Understanding ” local insurance ” is essential if you are purchasing a holiday home overseas, these are just some examples of the difference you may find between United Kingdom and overseas.

At Assetsure.com you can find out more about holiday home insurance and understand some basic holiday home investment tips.