If you are thinking of cutting holiday costs by exchanging homes with someone from a part of the world you want to visit, you are part of a growing trend. In theory, the only cost involved will be your plane fare. In practice, though, there may be other costs. There is a risk that your swap partners may not take good care of your home, and they may even cause damage, or be dishonest enough to steal your personal property. How can you protect yourself against that risk?
Insurers are wary of any non-standard situations and clearly if your house is going to be occupied by people who are strangers to you, that’s not standard. Check your insurance cover, and bear in mind the following:
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You need to tell your insurer about your plans. They may or may not be prepared to extend cover to your situation, but there’s no point in putting your head in the sand. You need to know whether you are actually covered or not rather than finding out the hard way when you try to make a claim. Some insurance companies will be quite happy to continue cover as long as the house is occupied, since it’s less vulnerable to burglaries. But there will be exclusions from cover.
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Theft and damage to your personal belongings won’t be covered by a standard policy during a house swap. Generally, your insurance policy will cover you for theft of items inside the home only if there is evidence of a break-in. Low cost home insurance policies go even further and often insist on high quality locks being in place and in use when the theft takes place. If you leave your home in the hands of a stranger, theft by that stranger will not normally be covered.
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If your general company won’t insure you even in return for an increased premium, you can go to a specialist in home swap insurance. Some home swap agencies have links with specialist insurers. For example the agency, Love Home Swap, has worked with the insurance brokers, Insurance Tailors, and insurers, Hiscox, to bring out a product that’s designed to supplement your normal household policy for the duration of the swap.
The policy, introduced in December 2012, covers the heads of damage which a standard insurance company is unlikely to look at, such as damage or theft of items of personal property during the swap. Malicious damage is also covered.
- Identity theft cover may not be available while your house is occupied by others. If it is, it will be invalidated if you are in any way negligent with your personal papers.
In the case of a house swap, particularly if it’s a longer one, identity theft is a risk which should be guarded against. After all, the swap partner will be in your home, and potentially could set up all sorts of accounts from that address to establish a fake identity. There have been instances of that happening, but subsequent problems have generally been solved by the home owner establishing that he or she has nothing to do with the fraudulent accounts.
Banks are usually happy to help put things right if they are satisfied that you are a fraud victim, as long as they do not suspect negligence or collusion. But they will expect you to take care of your papers and store them securely.
The true nightmare situation, where a homeowner returns from a home swap holiday to find that their swap partner has assumed their identity, sold their house, and disappeared with the proceeds, seems to be more of an urban myth than anything else, though there’s no doubt that the scenario is within the bounds of possibility. A successful UK TV drama was based on this plotline in 2002, but happily no copycat crimes have been reported.
Nonetheless, it’s obviously common-sense to make sure that any documents which could be used to establish identity, all bank account statements, other financial papers and the deeds to the house should be securely stored during the house swap.