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If you’re thinking of renting out your second home, you’re not alone. Between July 2024 and June 2025, nearly 94 million guest nights were spent in short-term lets in the UK, marking a 10.8% increase on the previous year (ONS, 2025).
As the figures show, holiday lets are extremely popular and are seen as a way to generate income. However, the way these properties are used introduces a different level of risk compared to long-term rentals.
Unlike standard tenancies, where one household lives in the property for months or years, holiday lets involve a steady flow of short-term guests. This change in usage affects everything, from how often damage occurs to how easily issues can be identified - which is why risk and insurance requirements often differ.
Holiday lets usually carry a higher insurance risk than long-term rental properties because of how frequently the property is used by short-term guests, and how often it is left empty between stays. This combination can lead to more frequent claims, a wider range of potential incidents, and increased responsibility for the safety of guests.
Below, we explore each of the factors that contribute to this higher risk level:
Members of the public staying in your holiday let for a weekend or a short break are less likely to treat it in the same way as a long-term tenant who calls it home. Mostly, guests are respectful regardless of the duration of their stay. However, shorter stays can sometimes lead to more relaxed and less “careful” behaviour.
For example, guests staying for a special occasion might spill drinks on carpets or misuse appliances they are unfamiliar with. Because each guest or group only stays briefly, there is less consistency in how a holiday let is cared for compared to a 12-month rental with one tenant.
Unlike long-term rentals, holiday lets are not occupied all the time. Depending on the season and how popular the property or area is for bookings, your holiday home can be left empty for days, or even weeks.
While the property is unoccupied, problems such as leaks, heating faults or electrical issues may go unnoticed. If a pipe bursts or a fault develops while the property is empty, the damage can become more severe before it is discovered. Empty properties may also be more vulnerable to break-ins or vandalism, increasing the insurance risk.
With a steady stream of new guests staying in holiday lets, there’s a greater chance of accidents happening. This is especially true since these guests are likely to be unfamiliar with the property, and any “quirks” it might have.
Common examples include slips on wet bathroom floors, trips on stairs, or minor kitchen accidents. Even small incidents can lead to claims if a guest is injured during their stay and you’re found to be liable. As a result, holiday let owners may face greater exposure to liability risks compared to a standard rental.
Even if you have clear “house rules” or guidelines outlined for your guests, you cannot ensure that they are always followed. This increases the risk of damage or accidents in your holiday let.
For example, there may be unauthorised gatherings involving “risky” activities like BBQs or firepits, the limit on guests may be exceeded, or pets may be brought into the property.
In some cases, this can result in damage to flooring, furniture, or fixtures. These situations can be difficult to predict and manage for any landlord, but especially when guests are only staying for a short time.
Lastly, when you put your holiday home up for rent, you become responsible for aspects of your guests’ safety. Beyond the maintenance essentials, this means you’ll need to put key health and safety measures in place to protect whoever’s staying in your property.
For example, properties should have working smoke alarms, safe electrical systems, and clearly communicated emergency procedures. These are legal and government obligations which can change, and are the customers responsibility to be fully aware of and fulfil. Therefore, if a guest is injured and safety requirements have not been met, this can increase both the severity of the situation and the likelihood of a claim.
All of the factors listed above (from less careful use to increased wear and tear) combine to increase the insurance risks associated with owning a holiday let, as opposed to a longer-term rental.
Since there are a higher number of guests using your property, the risk of claims is statistically higher, too. This may be accidental damage, liability claims from guest injuries, or problems that arise while the property is unoccupied.
That said, there are simply more variables for insurers to consider when calculating the cost of holiday let cover.
Get a holiday home insurance quote
While you are technically a “landlord” when renting your property out as a holiday let, landlord cover isn’t necessarily your best bet. Standard landlord insurance is generally designed for properties with long-term, stable tenancies and, therefore, more predictable levels of risk.
Since holiday lets operate differently, and are exposed to their own unique risks, landlord insurance does not always align neatly with the needs and challenges of a holiday home.
Read our guide to the differences between holiday let and landlord insurance for more.
Renting out your second home for short stays is exciting and can bring in welcome extra income. But, before anyone signs the guest book, it’s important to prepare by getting the best holiday home insurance policy in place.
If you are renting out a property as a holiday let, explore your options with Direct Line for Business and get a quote tailored to your needs. For more guidance, visit the Landlord Knowledge Centre for practical advice and support.