Protect your holiday let investment with the right insurance cover. Learn what policies you need, what they cover, and how to avoid costly gaps.
Running a holiday let is one of the most rewarding ways to generate income from property — but it also comes with risks that a standard home insurance policy simply won't cover. From guest injuries to malicious damage and loss of rental income, the right insurance is not a luxury; it is a necessity.
This guide walks you through everything you need to know about holiday rental insurance in the UK, including what types of cover exist, what to look for in a policy, what is typically excluded, and how much you should expect to pay.
Disclaimer: This article is for informational purposes only and does not constitute professional financial, legal, or tax advice. Consult a qualified professional for your specific circumstances.
Many owners make the mistake of assuming their existing home insurance policy will cover their holiday let. It almost certainly will not. Standard home insurance is designed for owner-occupied properties. When you rent out your property — even occasionally — you introduce commercial activity that falls outside the scope of a domestic policy.
If a guest is injured on your property and you make a claim under your home insurance policy, your insurer may refuse to pay out, void your policy entirely, or even pursue you for misrepresentation. The consequences can be financially catastrophic.
Holiday let insurance is a specialist product designed specifically for properties that are rented to guests on a short-term basis. It recognises the unique nature of the risk — multiple different guests throughout the year, periods of vacancy, and the commercial nature of the activity.
Buildings insurance covers the physical structure of the property — walls, roof, floors, permanent fixtures and fittings — against damage caused by events such as fire, flood, storm, subsidence, and escape of water.
If you have a mortgage on your holiday let, your lender will almost certainly require you to hold buildings insurance as a condition of the loan. Even if you own the property outright, it would be extremely unwise to operate without it.
For a holiday let, your buildings policy needs to account for:
If you furnish your holiday let — and most short-term rental properties are fully furnished — you need contents insurance to cover the furniture, appliances, soft furnishings, kitchen equipment, and other items inside the property.
Holiday let contents insurance differs from domestic contents insurance in that it accounts for the higher wear and tear that comes with multiple guest turnovers, and it is designed to cover items used by people other than the owner.
Think carefully about the replacement value of everything inside the property. Hosts often underestimate contents value; a well-equipped three-bedroom cottage with quality furniture, a dishwasher, washing machine, television, and linen could easily have contents worth £20,000 or more.
Public liability insurance is arguably the most critical cover for any holiday let owner. It protects you if a guest or visitor is injured on your property — or if their belongings are damaged — and they hold you responsible.
Examples of claims that public liability insurance would cover:
Claims can run into hundreds of thousands of pounds when personal injury is involved, particularly if the injured party is unable to work. A minimum of £1 million in public liability cover is standard; £2 million or £5 million is advisable, and many policies offer this as the default.
If your property is damaged and becomes uninhabitable, loss of rental income cover reimburses you for the bookings you are unable to fulfil while the property is being repaired.
This cover is particularly valuable for hosts who rely on their holiday let income to cover mortgage payments or maintenance costs. Without it, a burst pipe or a fire could leave you simultaneously dealing with repair costs and a loss of income that could last months.
Check whether the policy covers:
If you employ anyone to help run your holiday let — a cleaner, a gardener, a property manager — you are legally required under the Employers' Liability (Compulsory Insurance) Act 1969 to hold employers' liability insurance with a minimum limit of £5 million. Failure to do so can result in a fine of up to £2,500 per day.
Note that self-employed contractors who carry their own insurance may not trigger this requirement, but you should take legal advice on your specific arrangements.
Legal expenses insurance covers the cost of pursuing or defending legal claims related to your property. This could include disputes with guests over damage, disputes with neighbours, planning disputes, or employment-related claims.
Given the cost of solicitor fees, even a relatively minor legal dispute can quickly become expensive. Legal expenses insurance typically costs very little to add to a policy and can provide significant peace of mind.
Home emergency cover ensures that if something goes wrong out of hours — a boiler breaks down on Christmas Eve, a pipe bursts overnight — you have access to an approved tradesperson quickly, without having to pay call-out fees yourself.
For a holiday let, where guests expect a functioning, comfortable property at all times, this kind of rapid-response cover is particularly valuable. A broken boiler during a winter booking is a potential refund, a bad review, and a damaged reputation — all of which are far more costly than the annual premium for emergency cover.
Key cover insures you against the cost of replacing locks and keys if a guest loses a key or if keys are stolen. While this is a relatively minor risk, replacement of high-security locks can be surprisingly expensive.
Understanding what is excluded is just as important as knowing what is included. Common exclusions include:
Always read the policy schedule and the full terms and conditions, not just the summary. If something is ambiguous, ask the insurer in writing before you need to make a claim.
Premiums vary depending on the size and value of the property, its location, how many weeks per year it is let, the level of cover selected, and the claims history of the policyholder.
As a rough guide:
It is worth getting at least three quotes from specialist holiday let insurers. Brokers who focus on holiday lets, such as Schofields, Intasure, and Towergate, often offer better terms than general insurers because they understand the risks and structures of short-term rental.
Insurance is just one part of running a professional holiday let operation. LetPilot helps hosts manage bookings, owner statements, guest communications, and property tasks all in one place — so the administrative side of your business is as well-organised as your insurance cover. Try LetPilot free at letpilot.co — no credit card required.