If you think claiming on UK home insurance policies is tricky, holiday homes abroad can be a minefield. Weasel-worded contracts are bad enough in your own language. But in French, Spanish or Croatian, do you stand a chance?
Dealing with complicated insurance policies on overseas homes is something more and more British people are having to come to terms with. According to some estimates, Brits now own more than 1m homes abroad.
So how can you monitor against calamity, guard against intruders or manage a successful and prompt insurance claim if you’re 1,000 miles away?
The first thing to do is to check the insurance small print before you even make a claim. “Most people don’t check anything when they buy abroad, let alone when they sign up for insurance,” warns Simon Conn, managing director of Conti Financial Services, a specialist foreign mortgage broker.
To establish whether your cover does exactly what it says on the tin (ie that your insurer cannot reject a claim because of a mind-boggling technicality or national law) you may well need expert advice.
For example, many owners are unaware that unless a swimming pool on a French property is properly gated, it may now invalidate your entire buildings insurance cover. The pool security rule is French law, and probably won’t be stipulated on the insurance policy.
Stephen Smith, managing director of specialist French lawyers Stephen Smith (France) Ltd, says prudent people should write to their insurers, stating a property’s special features – if there is a shared driveway, who has the responsibility for boundary walls or the space between floors in a block of flats – to make sure they are protected.
Policies for non-UK homes can be full of catches. Buyers must go through them line by line to avoid getting stung. Contracts often apply something called the “averaging rule”: if you underinsure on the cover, any claim is reduced by the same percentage.
European cover also tends to be less comprehensive than for the UK domestic market. Buildings insurance may include just the house, and you have to make sure you add on any gardens, outbuildings or the swimming pool. Policies also frequently exclude letting the property out to tenants. Subsidence and earthquake may also be omitted. There can be low single item cover and it may be difficult to get valuable art or furniture included.
Public liability is also generally lower – some Portuguese schemes offer as little as €100,000 euros of liability cover. Spanish buildings insurance sometimes excludes fixed items like such as kitchen cupboards and bathroom fixtures and fittings. You could even find insurance invalidated by having the wrong brand of locks on the doors.
Most contracts impose conditions if you are away from the property for over more than a month at a time. You may need someone to come in to check regularly, and may have to drain down the plumbing or leave the heating on.
In some countries such as France, it can make a lot more sense to take out contents cover from a UK insurer. In France cover can be all but useless to UK resident owners, says Smith, because criminal claims must be reported to the police within 24 hours, or 36 hours for a civil incident.
However, in other countries, the decision whether to buy insurance in the host country or in the UK isn’t so clear cut.
Going through a UK provider is more comfortable, however. Dealings are in your mother tongue, British insurers are said to be more customer-friendly, cover can be broader and the appeals system is accessible if the company fails to measure up. The Financial Ombudsman Service in the UK is relatively user-friendly.
The big question, however, is whether your insurer is capable of sorting out a claim when something goes awry and you are hundreds, if not, thousands of miles from your property.
Some insurers either have a network of staff in territories covered, or dispatch loss adjusters from the UK when necessary. So before taking out cover, check how your insurer would deal with a claim.
With the growth of ownership abroad in the past few years, Brits with overseas properties can choose from have a greaterthe number of companies offering foreign holiday home insurance has increased. Saga, Harrison Beaumont, Towergate, Hiscox and HFIX are a few insurers that cover overseas properties. Cover is available for a large number of countries but the US is a notable exception.
People buying with the help of local finance are normally obliged to buy insurance in the same country. The good news is that local cover does tend to be cheaper.
If you go native, look for a contract worded in English, or have the document properly translated so you understand what you are getting. Try and get reliable advice on who to buy from. Your mortgage lender might be able to help here. Make sure the company is properly regulated, and has a good reputation locally. Some providers likesuch as Zurich and Mapfre in Spain have English- speaking helplines.
If you do opt for a local policy, you may need to learn a trick or two to ensure results. Smith recommends people in France go to the company’s local broker or “courtier” rather than the central office. You can embarrass a courtier among his fellow villagers if he fails to pull his finger out. When one central office laughed in a client’s face and said they were too busy to co-operate with a claim, Smith accompanied him to visit the courtier who sold the policy, and used a few legally-couched threats to elicit an almost instant resolution.
Retired architect John Sutherland and his wife Martha (not their real names) live in London, but spend a few months of the year in their flat near Marbella, Southern Spain. The buildings and contents insurance on the apartment was arranged by the developer, as is customary for blocks where not all the flats are sold.
The two occasions in the past couple of years the pair have tried to claim on their insurance, they have been blocked by the provider company’s inertia, and their own inability to navigate the local systems. John says: “They wouldn’t come and look [at the flat], they didn’t comment... Everyone seems brain dead. We don’t even know if the company responded. It’s a whole bowl of treacle.” The cover is with a local supplier, is written in Spanish, and even when the Sutherlands had the policy translated into English it wasn’t clear what was covered.
The spouses ended up paying out to repair the damage themselves, as it was easier than persisting with the unresponsive insurer. They didn’t know a reliable lawyer to take up the cudgels on their behalf.
John says: “I believe unless you have someone to manage the property, who speaks fluent Spanish and English [and can pursue the claim], you’ve had it.” One claim was for flooding in John and Martha’s underground storage room. The other was for a broken window, caused, they suspected, by a lawn mower throwing up stones.
