Holiday Home Insurance: What You Need to Know

Owning a holiday home is a dream for many Australians – whether it's a coastal retreat, a mountain cabin, or a country cottage. But while your holiday property brings joy and relaxation, it also comes with unique risks that require specialized insurance coverage. Let's explore what holiday home insurance covers and learn from real-world claims examples.

What Makes Holiday Home Insurance Different?

Unlike your primary residence, holiday homes face distinct challenges:

• Extended vacancy periods – Empty properties are more vulnerable to undetected damage

• Higher risk of malicious damage – Unoccupied homes can attract unwanted attention

• Weather exposure – Properties in coastal or bushfire-prone areas face specific natural disaster risks

• Guest-related incidents – If you rent your property, you're exposed to liability risks from guests

In Australia, specialized underwriters offer tailored policies specifically designed for holiday properties and short-term accommodation.

Real Claims Examples: Learning From Experience

Example 1: The Burst Pipe Discovery

The Scenario: The Johnsons owned a holiday home in the Blue Mountains that sat empty for three months during winter. When they arrived for their Easter break, they discovered a burst pipe in the upstairs bathroom had been leaking for weeks. Water had damaged ceilings, walls, carpets, and furniture throughout the property.

The Claim: $47,000 for water damage repairs, replacement of damaged contents, and accommodation costs while repairs were completed.

The Lesson: Escape of water is one of the most common holiday home claims. The extended vacancy meant the damage went unnoticed, significantly increasing the cost. To prevent this:

• Install water leak detection systems with mobile alerts

• Have a trusted local contact inspect the property regularly (at least monthly during extended absences)

• Consider turning off the water main when the property is unoccupied for long periods

• Ensure adequate heating during winter to prevent frozen pipes

Example 2: Storm Damage and the Debris Impact

The Scenario: A severe summer storm hit a beachside property on the NSW Central Coast. Strong winds lifted tiles from the roof, allowing rain to penetrate the interior. Additionally, a falling tree branch from a neighbor's property crashed through the back deck, causing structural damage.

The Claim: $28,500 for roof repairs, internal water damage restoration, deck reconstruction, and emergency make-safe services.

The Lesson: Storm damage is particularly prevalent in coastal holiday areas. This claim highlights several important coverage elements:

• Storm and tempest cover – Essential for properties in exposed locations

• Impact damage – Even if caused by a neighbor's tree

• Emergency mitigation costs – Immediate tarping and securing of the property prevented further damage

Prevention tips:

• Conduct annual property maintenance, especially roof and gutter inspections before storm season

• Trim overhanging branches and maintain trees

• Install storm shutters in cyclone-prone regions

• Document the property's condition with photos for insurance purposes

Example 3: The Short-Term Rental Incident

The Scenario: The Patels listed their Sunshine Coast holiday unit on a short-term rental platform. During a three-night stay, guests accidentally started a small kitchen fire while cooking, which triggered the fire suppression system. While the fire was contained, the water damage from sprinklers affected the kitchen, living area, and the unit below.

The Claim: $62,000 including fire damage repairs, water damage restoration to two units, loss of rental income during repairs (8 weeks), and public liability for damage to the neighbor's unit below.

The Lesson: This is a complex claim that demonstrates why standard home insurance isn't adequate for rental properties. Key coverage elements included:

• Accidental fire damage – Even when caused by guests

• Consequential water damage – From fire suppression systems

• Loss of rental income – Critical for properties generating income

• Public liability – For damage to third-party property

If you rent your holiday home:

• Ensure your policy specifically covers short-term rental activities

• Consider policies designed for holiday accommodation (like those from Kokomo or G.O.A.T Insurance)

• Implement proper guest screening and house rules

• Install appropriate safety equipment (smoke alarms, fire extinguishers, fire blankets)

• Consider requiring security deposits

• Keep comprehensive records of all bookings

Essential Coverage for Holiday Homes

Based on these examples, your holiday home insurance should include:

1. Building cover – Insure for full replacement value, not market value

2. Contents insurance – Often furnished properties have significant contents value

3. Loss of rent/rental income – If you rent the property out

4. Public liability – Especially important for rental properties (minimum $20 million recommended)

5. Emergency accommodation – For yourself if the property becomes uninhabitable

6. Gradual damage exclusions – Understand what's NOT covered (like wear and tear)

The Underinsurance Trap

Action item: Review your sum insured annually, accounting for:

• Building cost increases

• Renovations or improvements

• Contents replacement values

• Regional building cost variations

Final Thoughts

Holiday home insurance requires careful consideration of your property's unique circumstances. The claims examples above demonstrate that adequate coverage goes beyond basic building and contents insurance – you need protection tailored to vacancy periods, rental activities, and location-specific risks.

Next steps:

1. Review your current policy – does it cover rental activities if applicable?

2. Verify your sum insured amounts are adequate

3. Implement risk management strategies (regular inspections, maintenance schedules, water leak detectors)

4. Consider specialist holiday accommodation insurers who understand these unique risks

5. Work with an experienced insurance broker who can access specialized markets

Remember, the goal isn't just to have insurance – it's to have the right insurance that protects your investment when claims occur.

Get Expert Advice on Holiday Home Insurance

Need specialist advice on protecting your holiday home investment?

Contact the experienced team at Insure More for tailored holiday home insurance solutions:

📞 Taree: (02) 6591 3467📞 Tuncurry: (02) 6555 5022

Visit to request a quote Holiday Home Insurance | Rental Insurance Quotes | Insure More @ Aust

Our local brokers understand the unique risks facing holiday properties in the Mid North Coast region and beyond. We can access specialist markets to ensure your holiday home has the right protection.

Insure More – your local insurance broker providing expert advice on holiday homes, short-term accommodation insurance, and comprehensive property protection.