Don’t Skimp to Save on Property Abroad Insurance

The recession is leaving us all needing to do whatever we can to scrimp and save and avoid falling into (any more) debt.  In order to save money people are cutting financial corners wherever they can, cutting back on essentials and even cutting out inessentials.  However, there is actually a limit to how far you should go in terms of cutting out essential items such as insurance.

In this article we’ll be looking at why you shouldn’t be skimping to save by under insuring your property abroad – and how you can instead save money on your premiums.

The shocking truth about the rate at which crime is rising now we’re all suffering fiscally speaking is enough to make anyone worry about securing that which is important to them – therefore, now is actually the time to check that your property abroad is properly insured.  Whether you keep it as a holiday home, you use it as a rental property or you live in it full time, you need the correct type of insurance – and in this article we’ll show you how you can keep a good level of insurance in place for your property abroad, but reduce your overall premium.

In the UK crime figures recently released show that burglaries are increasing in number, and police bosses have warned that this trend will continue as the recession bites harder.  Overseas we do not have reliable figures on a nation by nation basis, however one can see how crime can increase as people’s wealth status decreases, and wherever there is a recession, there is a high chance that an unattended property is at greater risk of being broken in to.

If you have a property abroad you have to insure it – you need buildings and contents insurance, just as you do in the UK, and sometimes you need additional insurance to protect against hurricanes or earthquakes for example.  Insurance requirements of course change on a nation by nation basis – but as a bottom line you should be insuring for replacement, i.e., replacement of your home if it is destroyed and replacement of your personal possessions if they are stolen or destroyed.

There has been a decrease in the UK in terms of the numbers of households getting their house and contents policies in place, an increase in the number of people cancelling insurance policies and therefore a direct increase in risk for people who are uninsured or underinsured in a country where crime against property is rising.  We can say quite confidently that those with homes abroad are highly likely to be considering their insurance needs as well, and perhaps some of you have even thought about leaving property abroad uninsured.

Well, think of it like this – you may actually have a legal obligation to have insurance in place on your building at the very least – especially if you have a mortgage on the property or if it’s a flat in a communal building which, if it burned or flooded could affect your neighbours.  You may well then have an obligation to pay out for any loss or damage they incur.  If your property is left unoccupied for long periods if you only use it as a holiday home for example, you need to make sure your insurer knows this as it affects your cover.  What’s more, if you let your home out as a business you need to have a specialist type of insurance in place – not only to protect your home and possessions from your tenants!  But in case they suffer any injury in your home abroad and they sue you as a result.

Hopefully you can clearly see why you shouldn’t be skimping on insurance on your property abroad – but how can you actually save money on your premium to make it more affordable?

Well, the number one way is to shop around.  In the UK it is very easy for us all to compare the market, go to moneysupermarket or use someone like confused.com or Lovemoney to compare and contrast the products on the market from all the different insurers.  But when you have a property abroad you may not be aware of all the different insurance product providers in the market.  Fortunately the likes of moneysupermarket are apparently expanding into international markets – but until they do you need to do a bit of groundwork yourself.  You can think of leading global insurers such as AXA and contact them, but you can also do a high street or newspaper search and look for companies offering insurance.

Go door to door if you have to with these companies, and ask them for a quotation to cover your requirements.  You can also ask others in the area where you have a property or go online to forums to communicate with other foreign home owners and ask who they insure through.

You can then think about increasing your excess, adding window locks, changing and upgrading door locks, putting in a burglar alarm, getting a caretaker and key-holder in place to keep an eye on your home, seeing if you can get a no claims discount and finding out whether an insurer will give you a discount for insuring homes and contents together.  These are all ways you can save on a premium.  You might also like to think about ways to reduce your risk of being broken in to or of suffering damage to your property…

As mentioned you can have a caretaker or key-holder who can check up on your home once a week.  That way if a bird gets stuck in your living room there’ll only be one week of poop to clean up, or if a snake thinks about making a nest in your bedroom it won’t hang around for long.  Alternatively, if in the winter a pipe bursts and floods your downstairs neighbour, someone can be called to come in immediately and repair the damage.  Having a property abroad is a fantastic investment for many people, but you have to look after that investment carefully – from getting insurance in place to having someone to keep a physical eye on the home.

If you’re only using the home sometimes as a holiday retreat, put all valuable items such as garden furniture and a TV out of sight when you leave.  If the home is let out, keep the value of contents contained in the property to a minimum so you get a good balance between quality and comfort for your guests, and affordable to replace for you if anything gets lost, damaged or stolen.

Finally, you don’t have to cut out insurance to save money – because in the long-term it could cost you far more than a simple annual premium.  It really is too great a risk to take.  Instead shop around and make your property as attractive for an insurer to insure as possible, and as unfriendly and unattractive for a burglar as possible.