How to Insure your French Holiday Home
You want to go to an apartment near the ocean or on the Mediterranean coast, in a nice cottage in the mountains or a pretty home in the countryside? Many people want to rent a place to rest and enjoy a quiet moment; during long holidays or simply for a few days. But accidents happen and have the potential to ruin your holidays. In order for you to enjoy the time of rental peacefully, as a landlord or a tenant, your seasonal rental home has to be insured. We will help you understand how to find the best insurance for your French holiday home as a landlord and also as a tenant. Here is a guideline to understand the different specificities of such insurance and why it is so important to have this type of coverage during your holidays!
What is a seasonal rental?
Offers for seasonal rentals have been slowly increasing over the last few years. More and more homes and apartments are available for seasonal rentals on the internet and the most difficult decision you face is making a choice between sea and mountain.
A seasonal rental looks like an ordinary rental, in the sense that the property's tenant will enjoy a place that is not his or her own, for a limited time and under a rental agreement.
Nevertheless, some criteria have to be fulfilled in order to identify a rental as being a seasonal rental, as it described in the following terms under French law:
- The good has to be furnished and equipped;
- The duration of the rental shall be flexible and the tenant will be able to choose the duration, which can be fixed to anything from one night to a week, or even a month;
- The landlord shall ensure the tenant that the good doesn't have any construction defects or any lack of maintenance;
- And home insurance should cover the rented good.
If all these conditions are fulfilled, then the rental can be considered as a seasonal rental and the landlord is allowed to rent his place for a variable duration.
Such seasonal rental is a good way to write off an investment, especially if it is a place the landlord likes to enjoy for part of the year only. Moreover, it offers the possibility for the owner to rent his or her good without signing a lease agreement that has stricter rules. The seasonal rental offers some particular and flexible tax rules that are a good option in order to monetize a second home or property. But you should nor jump into renting your homes without thinking of a good insurance option.
Is seasonal insurance mandatory?
There is no obligation for the tenant nor the landlord to have seasonal home insurance if they rent a place for their holidays (unlike a classical rental agreement for an apartment for longer duration).
Nevertheless, there is usually an insurance plan subscribed either by the landlord or the tenant. As a matter of fact, the owner should always have an insurance plan for its goods in order to prevent and cover any damage that may occur. The tenant should also have a civil liability that would give the insurance to cover any damage caused to a third party.
Furthermore, in practice, the landlord can either have his or her own insurance or ask the tenant to have his or her own insurance and provide a special holiday civil liability certificate at the beginning of the rental. All the details will be written in the seasonal lease agreement and given by the landlord.
Which seasonal insurance should you choose as a landlord?
The landlord can either subscribe to his or her own home insurance, or require an insurance scheme from the tenant. If the owner has his or her own contract, he or she might verify the minimum occupancy required by the insurer in order to be covered even in case of theft. Some home insurance providers may decline to provide coverage, for theft especially, if the place is not occupied during 90 consecutive days.
Global insurance for the holiday rental
If you decide, as a landlord, to rent your home or second home as a holiday rental, you should first call your insurer and ask if such lease would be covered by your home insurance. The multirisk home insurance can also cover the seasonal rental and provide the landlord with a specific guarantee for civil liability towards the tenants. It is not a guarantee to be underestimated as it will cover the owner's liability in case of accident and injury of the tenant inside your home.
According to the fact that there is no obligation to subscribe to home insurance for your holiday house or apartment, if you, as a landlord, do not have an insurance plan you will be fully responsible in case of any damage. It means that any damage caused by water damage, a fire or any other situation, you will be fully responsible for the losses caused to your neighbours and your own goods.
The amount due to repair such damages may be very high and you thus won't be wasting your money by subscribing to an annual insurance plan for your home. You can subscribe to a home insurance plan called “on behalf of whom it may belong”, in order to cover any risk of damage or loss caused by you as the owner or any tenant to the building or third parties. It is a global solution to cover both the landlord and the tenant in case of damage on the good or to any third party.
Having insurance “on behalf of whom it may belong” is an easy way to be sure that your good is well insured with an insurance type you have chosen as a landlord.
Civil liability coverage for the tenants
In case of any damage caused by water, a fire or any other hazardous situation, the owner might be held fully responsible for the losses caused to the neighbours if he or she does not have any insurance for the place rented.
There is no obligation to subscribe to any kind of global insurance, and so the owner of a place that he or she decides to rent can also choose just to add an option called “the waiver of action”. With this option, the landlord will ensure the tenant that he or she will not be sued by in case of responsibility of damage caused to the rented place. In this specific case, there is no coverage of the risk of damage to third parties or any other property.
Therefore, the landlord is allowed to require from the tenant a certificate proving that he or she will be insured for the other risk and civil liability during the stay in the rented place.
The security deposit needed to protect your good
Asking for a security deposit is a good way to be sure that as a landlord, you will have an amount of money in case of damage on your good. It is a common practice for many kinds of rentals, and seasonal rentals are part of them. Usually, the landlord asks for an additional amount of between 10% and 30% of the entire price of the rental, in order to cover any damage caused to his or her good.
As a landlord, you are entitled to ask the tenant to provide you with such amount by explaining, if required, that it is an insurance for you to be able to repair any damage caused to your good during the lease. At the end of the rental period, if there has been no damage, you will give the security deposit back to the tenant.
Which seasonal insurance to choose for a tenant?
As a tenant, if you decide to go on holiday for a few days or weeks, there is no legal rule under which you have the obligation to subscribe to a specific insurance plan. Nevertheless, in order for you to enjoy your stay peacefully and feel relaxed during your holidays, we would encourage you to be covered.
The holiday guarantee
As a tenant, usually your seasonal rental, meaning a rental for your holidays, will be covered by a specific guarantee of your home insurance: the holiday guarantee. This particular option of your home insurance will cover you during the time of your holidays and the duration of your stay in your rented home or apartment.
All damages such as theft or water damage, or even damages caused to third parties and neighbours would be covered. Therefore it is important, before leaving to go on your holidays, to check your home insurance contract and make sure that:
- This option and coverage for your holidays are included,
- The coverage will fit your needs during the time of your holidays,
- The scope of it will cover the risk for the place rented (there might be a geographical restriction) and for the duration of your holidays (there might be a time limitation)
If the holiday guarantee you already have is not enough to cover you during your holidays, you can still ask for an extension to your insurer.
So, before you leave on holiday:
- Make sure your insurance includes a holiday guarantee.
- Provide your insurer with the information that will be required for an effective coverage: the address of the place you will stay at during your holidays, the number of rooms, the duration of your stay and any other specificity that may be asked by your insurer.
The seasonal rental insurance
If your home insurance for your principal residence does not cover your holiday rental, and if there is no insurance taken out by the landlord and called “on behalf of whom it may belong”, then you can look for a specific seasonal rental insurance.
Seasonal rental insurance would be the perfect way to have the security of good coverage even if you are away from home, in a rented house or apartment.
Depending on the insurer and the offers, the options may vary and cover even the loss of your luggage or the cancellation of your rental. It is up to you to add such options depending on your specific situation. Some insurers may also cover the risk of early termination of your holidays in case of accident, or hospitalization, or even in case of damage in your principal residence.
The basis is that the seasonal rental insurance will cover your holiday civil liability for you and your family travelling with you.
Ask for quotes! The best way to find the type of insurance that will fit your needs is to ask for quotes from different insurers. Before you go on holiday, you have time to do some research and compare the different offers and coverage.
The waiver of actions by the landlord
If there is a waiver of actions included in the lease agreement, it means that the landlord commits himself or herself not to take legal actions against the tenant in case of damage on his or her good. Therefore, the tenant has the peace of mind that he or she is covered and won't be prosecuted if any damage occurs on the good. Nevertheless, this waiver covers only the risk for the property itself and not any damage that may occur to third parties. So, as a tenant, make sure you will be covered in case of damage to third parties with civil liability insurance.
This type of waiver of actions taking out by the landlord is not enough if the tenant does not have any civil liability insurance.
The civil liability provision
Civil liability is always needed in order to cover you in case of a dispute arising from damages that would have been caused to the neighbours or any other third party. Indeed, you may be held liable in case of “appeal of third parties and neighbours”, and if you are not covered for such risk the damages can easily be very high.
Read the provisions of your initial home insurance carefully and look for this specific topic of “Civil liability coverage” (couverture de responsabilité civile). If such a guarantee is not included, you should ask for an amendment or add an additional option that would cover your civil liability both during your holidays and in your seasonal rental.