Insurance for a holiday rental property: what it covers and why you need public liability cover

The standard home insurance policy is not designed for a property that welcomes different guests every few days. If a guest gets hurt at your property, or starts a fire, your usual home policy may not cover it, or the insurer may even void the cover if it did not know you were letting to tourists. That is why specific insurance for holiday rental properties exists.

Is it compulsory?

It depends on the comunidad autónoma (Spain's autonomous regions). Public liability insurance is compulsory in, among others, Andalucía, Baleares, Comunidad Valenciana, Canarias, Galicia and Asturias, usually with minimum cover of €300,000. Not having the compulsory insurance can lead to fines of several thousand euros, depending on the region. It is worth checking the exact requirement in your region as part of the holiday-let licence process.

What public liability insurance covers

It covers third-party claims for personal injury or property damage that happens in the property during a stay: for example, if a guest falls and hurts themselves, or if a moment of carelessness damages the neighbour's flat. Typical cover ranges from €150,000 to €600,000, with indicative premiums of €80 to €150 a year.

Beyond public liability: comprehensive insurance

Public liability protects you against third-party claims, but it does not cover damage a guest may cause to your own property or furniture, nor vandalism, a fire or a water leak. That is what combined policies are for:

• Basic public liability insurance (public liability only, €300,000): from €80 to €150 a year.
• Damage + public liability insurance: from €150 to €250 a year.
• Full comprehensive insurance (public liability + damage to the property + vandalism + fire + water): from €250 to €500 a year.

What to check before you sign up

• That the policy expressly states «holiday rental» or «tourist use»: a conventional home policy may exclude this use or void the cover if it comes to light.
• The public liability sum insured, and whether it meets the minimum required in your region.
• Whether it also covers the contents and furniture, not just the building itself.
• Whether it includes legal assistance if a guest makes a claim.

Would you rather someone handled it for you?

At beBalmy we check that your property has the right cover as part of the full management of your holiday rental. Tell us about your situation and we will tell you how we can help.