For many people the insurance of an overseas property and its contents is very much an after thought. So much time and effort goes into every other aspect of the property search and purchase process that there is perhaps no time left for thinking about insurance.
What this so often means is that expats and owners of homes overseas scrabble round at the last minute to get some insurance – any insurance – in place to cover the value of their home and personal possessions.
Well, according to a leading British based insurer, this leads time and time again to the homeowner being under insured, incorrectly insured and simply exposed to risk. Today we’ll look at the importance of properly insuring your property abroad…
When you think about it, if you were going to be leaving your home in the UK unoccupied for months at a time you would do everything you possibly could to make sure you had absolutely the very best insurance in place to cover your home in your absence – so why don’t Brits who own homes abroad do the same?
In part this has to do with the general unfamiliarity of the way things work abroad, and how to go about finding the best insurer and best insurance product for your property. In the UK one can just compare online, but few other nations offer such a facility – and where they do in say Germany or France perhaps, you need to be fluent in the language of the nation to understand the search results that you are returned.
This usually means an expatriate or a Briton who has bought a home abroad will take a recommendation from an estate agent who may well be getting a back hander from the insurer they recommend, or they walk into the first insurance office they see and sign up to whichever policy offered. This leads to Britons paying way over the odds and/or having inadequate or incorrect cover.
In our opinion the majority of people who own property abroad are incorrectly insured! And then of course this can lead to problems and even heartache in the event that something happens to the property and a claim has to be made. One of the biggest failings of overseas property insurance policies is that they are based on the insured person being resident in that nation and living full time in the insured property. When a claim is subsequently made and it’s discovered that actually the insured person is non-resident and the home is a holiday home occupied only occasionally, the claim is invalid and no payout is received.
Another issue arises when the property in question is let out commercially as a holiday let. In the same way as you would need a special type of insurance in the UK if you rented out your home, so you generally need a special insurance abroad if you let out your jet to let foreign home. If you don’t have the right type of insurance and a tenant causes significant damage or accidentally leaves a tap running or something, you will want to make a claim but perhaps be unable to do so.
As you can therefore see, getting the right insurance in place from the right provider is critical and key to the ongoing protection of your home abroad. There are UK based insurance products on the market now from the likes of Tonic Underwriting, which endeavours to protect a home abroad under British laws and rules. Other leading insurers sometimes offer insurance on holiday homes in the most popular destinations such as Spain and France. So, shop around – and ideally shop around in advance of your property purchase. You will then never risk having to rush your decision. Finally, when you do decide on an insurer, get the contract, terms, conditions and small print translated and if needs be interpreted by your solicitor. Don’t take a risk with this significant and very important purchase.