May 30th, 2014
Most homeowners know the importance of protecting their largest asset with a home insurance policy, but what about those who own more than one home? Vacation or second homes need similar protection, but usually don't need the exact same type of coverage. Here's what you need to know about homeowners insurance for your second home:
Your primary insurance doesn't count
If you live in one state and own a vacation home in another, the insurance policy you have on your primary home won't cover your other property. Instead, you will need to take out another policy to get full protection. In some cases, your belongings may be covered at a second location from your primary insurance policy, but likely not the full amount that you would need should they have to be replaced.
In some cases, you can get covered for two homes in one policy. Sounds like a pretty sweet deal, right? In reality, putting your two homes together could be potentially hazardous to your finances. While it may be easier, a two-for-one policy won't address always all the needs of each home. Your vacation home may have some risks that your primary home doesn't carry, or vice versa. This could cause you to either overpay for a policy or get coverage that doesn't cover you. In all cases, it can be best to speak with an insurance professional to help you understand what type of coverage and policy is right for your home away from home.
Many people enjoy spending time near the ocean or in a great vacation destination, and choose a home in that location. However, the same things that attracted you to that area can also mean a higher insurance rate. For instance, if you own a vacation home that has a pool, the homeowners insurance rate will be higher. In addition, a home that is close to a body of water may be at a higher risk for floods or hurricanes, which can mean that you will need additional coverage and the cost of protection could be more expensive. On the reverse side, if you have a home in a mountain range, you are probably not at a great risk for hurricanes, but mudslides could pose a threat and will be reflected in a policy.
If you're fortunate enough to own more than one home, you probably spend more time at your primary residence and less time at your secondary home. Unless you split your time 50/50 between your properties, one is usually left alone more often. This means there may be several months out of the year where you aren't at your vacation home, leaving it vacant and vulnerable to theft. In addition, if you rent out your property when you are not using it, you are increasing the risk of damage and theft from renters and other people coming in and out of the home. Rental properties and vacation homes can therefore have a higher rate for home insurance coverage.