Insurances for holiday homes rented to tourists

What insurance do you need when renting out your holiday home to tourists?

Renting out a holiday home to tourists can be a great opportunity to earn additional income. To make the experience smooth and stress-free, it’s good practise to choose the right holiday home insurance. It is not just a formality - it's a smart step that protects your investment and gives you peace of mind. While you are not legally required to have home insurance for a second home, it is strongly recommended. Without appropriate coverage, you would be responsible for all costs in the event of a claim.

When asking yourself What insurance do I need to let a holiday home? remember that standard home insurance rarely covers short-term rentals. This can leave you underinsured or even completely unprotected. To avoid gaps in cover, make sure your property is insured under a commercial household insurance that offers broader protection than a standard private household policy.

In this article, we explain why proper insurance matters, what can go wrong without it, and which types of coverage every holiday home owner should consider.

Risks of being underinsured when renting your holiday home

Being underinsured means that your insurance does not fully cover the real risks of renting your property to tourists, which can lead to serious financial consequences.

Common risks include:

Claim refusals because the policy does not allow short‑term rentals
Costly repairs after damage caused by guests
Legal liability claims if a guest is injured on the property
Loss of rental income if the home cannot be rented after an incident
Increased exposure during unoccupied periods, especially out of season

Unexpected situations can happen at any time, and they often bring additional costs. Having the right insurance helps protect your rental income, safeguards your property, and keeps your holiday home business running smoothly.

Key insurance every holiday rental owner needs

Having the right holiday home property insurance is an essential part of responsible property management. The following type of cover help protect your investment and reduce the risk of unexpected financial losses.

1. Buildings insurance that allows tourist rentals

Buildings insurance protects the physical structure of your property, including walls, roof, and permanent installations. Renting your home to tourists increases the risk of accidental damage due to frequent occupancy. Short-term rentals lead to more wear and higher risk:

repairs after fire, flooding, or storms can be very costly
claims may be denied if the policy does not explicitly cover tourist rentals

Why include the building in your insurance?
Having a policy that clearly allows tourist rentals is essential. It ensures your home can be repaired without causing significant financial strain.

2. Natural hazards insurance for holiday rentals

Natural hazards insurance is an important protection for both property owners and guests. A policy covering damage caused by natural forces can prevent significant financial losses and ensure business continuity in the event of a catastrophe. It’s important to review the scope of coverage: standard property insurance may not include all types of risk (floods, wildfires, earthquakes or hurricanes) so tailoring the policy to the location and specific features of the property is recommended.

3. Contents insurance for holiday lets

Holiday homes are typically fully furnished and equipped for guests, who daily use:

Furniture
Appliances
Electronics
Decoration
Equipment

This naturally increases the risk of wear, accidental damage or breakage. Holiday home contents insurance cover the cost of repairing or replacing damaged items. Without this protection, even relatively small incidents like broken chairs, stained bedding, damaged appliances can quickly add up, leading to unexpected expenses that reduce the profitability of your holiday rental.

4. Business liability insurance for holiday rentals

Business liability insurance is one of the most important types of cover for holiday home owners. It protects you financially if a guest:

is injured on your property
has belongings damaged due to a defect
files a compensation claim requiring legal defence

As the property owner, you are legally responsible for maintaining a safe environment. Medical bills, legal fees or compensation claims can be extremely expensive and a single accident can have serious financial consequences. Business liability insurance provides essential protection against claims that could otherwise threaten your financial stability.

5. Loss of rental income insurance

If your holiday home becomes unfit for rental due to fire, water damage, or another insured event, repairs may take weeks or even months. During this time, you may lose a significant amount of expected rental income.

Loss of rental income insurance helps bridge this gap by compensating you for the income you would have earned while the property is being prepared. This cover is particularly important for owners who rely on rental income to meet mortgage payments or ongoing maintenance costs.

6. Unoccupied property insurance for holiday homes

Holiday homes are often left empty outside the tourist season. Unoccupied properties face higher risks, such as theft, vandalism, or damage that goes unnoticed for long periods.

Many standard home insurance policies limit or exclude cover when a property is empty for an extended time. Insurance designed specifically for holiday homes takes these gaps into account, ensuring that your property remains protected even when no guests are staying there.

7. Optional extra cover to consider

In addition to essential insurance, holiday home owners should also think about extra cover that protects against more specific risks linked to tourist rentals. These optional policies can help reduce unexpected costs and make it easier to manage problems when something goes wrong:

commercial legal protection insurance in case of any legal disputes with guests
cover for vandalism or intentional damage by guests
insurance for extra features such as a swimming pool, hot tub or sauna
cover for alternative accommodation for guests

How much does holiday home insurance cost?

The cost of insurance for a holiday home rented to tourists can vary widely, as it depends on several factors. These include the property’s location, size and condition, as well as how frequently it is rented and the level of cover chosen. Because every rental property is different, insurers usually calculate premiums on an individual basis. The most reliable way to determine the cost is to request personalised quotes from multiple providers and compare their offers.

Why choose Interhome as your trusted partner?

Interhome is the ideal partner for holiday home owners who want to rent their property to tourists with confidence. We support owners not only in the day‑to‑day management of rentals, but also by providing guidance on legal and administrative requirements. This helps ensure everything is handled correctly and in line with local regulations. As part of your cooperation with us, your property is automatically covered against damage caused by your guests. This added value is included at no extra cost and gives you peace of mind with every booking. Find out more in our brochure.

Do you want to rent out your accommodation with immediate results?

Then use the contact form provided to receive a free, non-binding offer tailored exactly to your needs.

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With more than 60 years of experience, a powerful global sales network, and personal contacts on site, Interhome is a strong partner by your side.

Summary: most important holiday home insurances

For holiday home owners the right insurance is an important part of smart property management. Key policies include:

building and contents cover for guest use
business liability insurance
commercial legal protection insurance
loss of rental income protection
cover for unoccupied periods

Together, they safeguard your property and earnings, giving you confidence and peace of mind.

FAQ: What insurances should a holiday home rented to tourists have?

Do I need special insurance if I rent my holiday home to tourists?
Yes. Standard home insurance often does not cover short-term tourist rentals, meaning claims may be refused if damage or accidents happen while guests are staying in the property.

Is public liability insurance really necessary?
Yes. Public liability insurance is essential because it protects the owner if a guest is injured or their belongings are damaged. Without it, the owner may have to pay high compensation costs.

What happens if my property is damaged and I cannot rent it out?
Loss of rental income insurance can cover the income you lose while the property is being repaired, helping you stay financially stable.

Does insurance cover periods when the holiday home is empty?
Insurance designed for holiday homes usually includes cover for unoccupied periods, which is important because empty properties have a higher risk of theft or unnoticed damage.

Are optional covers worth considering?
Yes. Extra cover for vandalism, legal disputes, or special features like pools or hot tubs can offer valuable protection and help avoid unexpected expenses.