How to ensure all your bases are covered: New policies are tailored to second homes

INSURING your second home - whether you intend to let it or not - is not easy these days. The insurance companies are wary because the property is unoccupied for great lengths of time, leaving it open to theft; in the winter, burst pipes or broken roof tiles can cause huge amounts of damage, because the problem might not be discovered for weeks.

Most mainstream insurers will cover a second home only if your primary residence is insured with them, and will then adjust the premium according to the second home's post code.

However, last week the AA launched a new product aimed at the second-home market that makes insurance much easier to obtain, although not necessarily much cheaper. A similar scheme is offered by the AndrewCopeland Group.

The AA holiday home insurance covers properties both in the UK and in popular European locations: France, Spain, Portugal, Italy, Greece and Malta. Under the cover, you may let the property if you wish and will be covered for up to pounds 100,000 of public liability, with access to a 24-hour emergency helpline. The policy also covers up to pounds 1,000 emergency travel expenses after a serious loss and up to pounds 3,000 to cover lost rental. The premiums are the same whether the property is in Britain or abroad.

This insurance may be taken out on its own, without being tied to your main home, and the premiums are the same for all homes regardless of where they are.

There are a couple of conditions. If the property is unoccupied for more than 30 days then the water must be turned off and the system drained. And security precautions, such as five-lever locks on the doors, must be installed. If the property is abroad, the policy does not cover subsidence.

Claims are paid in sterling and the minimum sum insured for buildings cover is pounds 20,000, with a maximum of pounds 200,000. For contents cover the lower limit is pounds 5,000 and the upper pounds 30,000. A pounds 25 excess applies, which increases to pounds 100 for properties in Italy, Greece and Malta. Cover is not available for thatched properties, caravans, mobile homes or beachhuts, nor in major cities. Chalets are slightly more expensive to insure.

The insurance scheme Andrew Copeland offers, which is underwritten by Lloyd's, also covers properties if they are rented out and includes liability cover of up to pounds 1m. In Britain, from 1 October to 1 April, water systems in empty properties have to be turned off and drained, or heating maintained at 55F.

The group does not ask for the usual minimum security requirements, nor will it inspect the property. You can take an extension to cover valuables, but the company suggests this is dealt with on your main insurance policy.

As with the AA's insurance, it does not matter where the property is, although contents insurance rises slightly for homes in inner city or very high- risk areas. For property abroad, the rates are lower and the conditions the same, except for homes that are let. There public liability is reduced to pounds 500,000, and this may be extended to pounds 1m for an extra cost. Premiums are pounds 2.50 per thousand for buildings cover and pounds 6.25 per thousand for contents. The minimum premium for both UK and abroad is pounds 60.

All the standards perils are covered, including flood and subsidence. If the property is sub-let, then theft has to be accompanied by forcible entry. Loss of rent can be covered up to 10 per cent of the sum insured. Countries included are Portugal, Spain, France, Greece, Italy, Malta, Cyprus, Eire and the Balearic and Canary islands.

For the main insurers, Norwich Union asks for water to be turned off if you are not there for more than 48 hours, and theft cover excludes valuables. It loads the premium by 50 per cent to reflect the increased risk. Guardian Royal Exchange covers the UK but has an overseas department, so might consider property abroad.

It insists all mains services are turned off when you are not in residence, and excludes valuables. However, a spokesman says it will adapt policies to different ways of life, depending on how far the second home is from the main residence and how often it is visited.

Eagle Star will insure your second home if it already covers your main residence. It asks that valuables are removed from the premises and charges a pounds 100 excess for theft. It also asks that someone inspects the property regularly.

Direct Line puts a 20 per cent loading on the premium and is, by a long way, the cheapest of all the companies we asked for a quote on a specimen home. If you are away for more than 30 days, you have to do all the things required by the others, and any items worth over pounds 1,000 are assessed separately. Adequate security precautions must be taken.

----------------------------------------------------------------- HOW PREMIUM QUOTES COMPARE ----------------------------------------------------------------- Based on a two-bedroom pounds 75,000 stone cottage in Bradford-on-Avon with contents valued at pounds 10,000 Building Contents Minimum cover GRE pounds 210.00 pounds 99.00 pounds 13,000 Norwich Union pounds 270.00 pounds 83.25 pounds 15,000 Eagle Star pounds 236.25 pounds 78.65 pounds 13,000 Direct Line pounds 150.00 pounds 51.00 pounds 12,000 Andrew Copeland pounds 206.25 pounds 65.00 Min prem * AA pounds 270.00 pounds 72.00 pounds 5,000 * Minimum pounds 60 premium for both buildings and contents -----------------------------------------------------------------

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