Your vacation home is an escape from everyday life. Whether your surrounded by firs in a lakeside cabin or a tropical setting with sandy white beaches, your second home is an investment and, just like your primary home, needs to be insured.
Most homeowners insurance policies provide limited coverage for personal property at an additional residence. Always check with your insurer to see if you can cover 2 homes under one policy, if your standard home insurance excludes certain properties, or not offer the right types or amount of coverage. The best solution for any event is to have a separate policy specifically for second homes. By creating a separate policy, you can tailor coverage options that make sense for any circumstance.
Before purchasing your home away from home, consider this:
Location: A second home is typically purchased as a destination spot and can sometimes be in another state. Each state insurance requirements are different and you will need to see your insurer to ensure your vacation rental is properly covered. Also, consider if it is in a flood zone or other “high risk” area that will require additional insurance. Check with your insurer to see if there are any additional policies you should add or if you should choose a private insurer.
Type of property: A vacation home’s age and types of building materials will also factor in your cost for insurance. For example, your coverage and liability may need to increase if your second dwelling is a single standing residence than a condo that is less of a risk due to homeowners associations and added security.
Amenities: If your home has a pool or any out buildings that are not attached to the home, you will need to increase your liability and may pay a higher insurance premium as these items often lead to a higher probability of liability claims.
Long periods with no occupants: Consider how often you will visit the vacation home or if you will hire someone to periodically check in on it. A major risk is that there will be no one there to make sure fires get put out or home invasions to get reported. Always be prepared with enough coverage and have your contents of the home up to date.
Will you rent: If you rent out your second home occasionally, you could be liable for injuries to tenants and visitors or be responsible for any damages. If you choose to only rent out one-time short-term rental, you may be able to add a simple extension to your existing homeowners policy. If you plan to regularly rent, you may need a separate landlord policy. Always read the fine print when using any rental services, like Airbnb and VRBO, to see what coverage is offered and if there are any limitations or exclusions. We suggest to always consult with an insurance professional before deciding to rent your vacation home to ensure your covered for any instances.
Insurance Information Institute