Thinking about renting out your property as a holiday let in the UK? One of the most important things you need is the right insurance. Standard home insurance won’t cover you for short-term stays—so what do you really need, and why does it matter?

This guide breaks down everything you need to know about holiday let insurance: what it covers, why it’s essential, how much it costs, and how to choose the right policy. Whether you’re letting out a coastal cottage, city apartment, or countryside retreat, getting insured is a must for peace of mind and protection.

What Is Holiday Let Insurance?

Direct answer: It's a specialist insurance designed for short-term rental properties, covering risks like guest damage, liability, theft, and income loss. Standard home insurance typically won’t protect against these risks.

Holiday let insurance is tailored to the unique needs of landlords who rent out properties for short stays. Because holiday lets often experience higher footfall, inconsistent occupancy, and a greater risk of accidental or intentional damage, they require a more comprehensive insurance solution than regular residential policies.

Typical scenarios covered include:

• A guest damages furniture or spills wine on a sofa

• Your rental property becomes uninhabitable after a fire

• A visitor trips over a rug and files a personal injury claim

• Your income is interrupted due to storm damage repairs

Why Do I Need It for My Holiday Let?

Direct answer: Because renting to guests adds unique risks that standard insurance won’t cover.

When you open your property to paying guests, you take on a new level of risk—one that traditional home insurance isn’t built to manage. Holiday let insurance provides peace of mind and financial protection in these key areas:

It protects you from:

🔧 Guest-Caused Damage – Accidents happen. A guest could break a light fixture, stain your carpets, or misuse an appliance.

🧾 Loss of Rental Income – If your home is damaged and can’t be rented, you could lose hundreds or even thousands in bookings.

🛑 Guest Injury Claims (Liability) – If a guest slips on wet flooring and suffers injury, you could be held legally liable for medical costs and compensation.

🔐 Theft and Vandalism – Your property and contents are at greater risk with transient occupancy.

⚖️ Legal Disputes and Fees – Disputes with guests or neighbours over property use or damage can lead to expensive legal battles.

Without this insurance, you could be responsible for all these costs out of pocket.

What Does a Good Holiday Let Policy Include?

Direct answer: The best policies combine building, contents, liability, and income protection into one tailored package.

Essential coverage should include:

• Buildings Insurance – Covers structural damage from events like fire, flooding, storms, or vandalism

• Contents Insurance – Protects your furnishings, white goods, and personal property in the let

• Public Liability – Covers guest injury claims or accidental damage to third-party property

• Accidental Damage Cover – Covers unintentional damage caused by guests

• Loss of Income – Reimburses you for lost rent during property downtime after an insurable event

Optional extras may include:

• Pet-related damage

• Hot tub or swimming pool cover

• Party damage cover

• Employer liability (if you hire staff like cleaners or gardeners)

• Legal expenses insurance

How Much Should I Insure My Property For?

Direct answer: You should insure for the full rebuild cost, not the market value.

The rebuild cost is what it would cost to completely reconstruct your home from scratch, including materials, labour, professional fees, and debris clearance. This figure is typically lower than the market price but must be accurate to avoid underinsurance.

To estimate rebuild cost:

• Use the free Building Cost Information Service (BCIS) calculator

• Get a professional valuation from a chartered surveyor

• Review the rebuild figure on your mortgage or existing insurance documents

Failing to cover the full rebuild cost could leave you paying out of pocket in the event of serious damage.

Is Holiday Let Insurance More Expensive Than Standard Home Insurance?

Direct answer: Yes, typically. Because the risk is higher, the premiums are too.

Why it costs more:

• Frequent turnover of guests

• Higher likelihood of accidental damage

• Greater wear and tear

• Higher liability exposure

Factors that affect price:

• Property size, location, and age

• Number of bookings per year

• Facilities like hot tubs, BBQs, or pools

• Your claims history and security features

The good news? Premiums are tax-deductible if you’re running your holiday let as a business.

Do I Legally Need Holiday Let Insurance?

Direct answer: It’s not required by law, but it’s strongly advised.

While UK law doesn’t mandate holiday let insurance, platforms like Airbnb, and Booking.com often require you to have cover. Mortgage lenders may also insist on specialist insurance for holiday lets as part of their terms.

Failing to get insurance could mean:

• Invalidation of your home policy

• Personal financial exposure for guest injury claims

• Inability to recover rental income if disaster strikes

Will My Regular Home Insurance Cover Short-Term Rentals?

Direct answer: No, standard home insurance rarely covers holiday lets.

Standard home insurance is designed for owner-occupied or long-term rental properties. Once you start accepting guests for short stays, your policy might be voided—leaving you without cover.

What to do:

• Notify your current insurer

• Ask if they offer a short-let add-on or extension

• If not, switch to a dedicated holiday let policy from a specialist provider

How Do I Get the Right Holiday Let Insurance?

Direct answer: Compare coverage—not just cost—and look for holiday let specialists.

Tips to choose the best policy:

• Use insurance comparison websites (like GoCompare, Compare the Market)

• Consider brokers who specialise in holiday let insurance

• Read policy exclusions and excess clauses carefully

• Ensure coverage includes liability, loss of income, and guest-related risks

• Look for insurers that allow claims for back-to-back bookings

If your holiday let is in a flood-prone or coastal area, confirm that your policy includes natural disaster cover.

Final Thoughts: Is Holiday Let Insurance Worth It?

Absolutely. It’s your safety net for unexpected events—whether a guest damages your space, your home is uninhabitable after a storm, or you face a legal claim.

Having the right insurance helps you:

• Protect your income stream

• Maintain guest confidence and platform eligibility

• Operate with peace of mind year-round

Need Expert Help Managing Your Short Let?

Pass the Keys is the UK’s leading short-let property management service, providing everything from marketing and guest screening to dynamic pricing and cleaning coordination. We also help hosts find reliable insurance partners and protect their properties from unnecessary risk.

Whether you’re just getting started or looking to improve your ROI, our local experts and tech platform make short-letting simple and stress-free.

Want to get started? Visit www.passthekeys.com or contact our team for tailored advice.