You’ve raised your children, saved your money, and your dream of purchasing a vacation home is finally coming to reality. After picking the location and touring homes you’ve finally found “the one”. Now it’s time to complete the loan and purchase the insurance. While you may think the insurance is the easy part that may not necessarily by the case.
A typical homeowners policy may not be the best fit when it comes to insuring a second home. Also, it can cost more to insure a second home than to insure your primary residence. Premiums are based on a variety of factors, like the amount of time that your home will be unoccupied, it’s location and the liability from renting the property. Because of that, your insurance needs are unique. We’ve gathered some insurance basics that will help you make the best buying decision when it comes to insuring a second home.
Coverage Options
At a minimum, your lender will require that you carry hazard insurance. This will protect your property against damage from theft, fire, flooding and windstorms. While not always required, it’s also a good idea to add liability insurance. Liability insurance will cover you and members of your household for accidental injuries to your visitors. For an extra layer of protection, a personal umbrella liability policy extends your liability coverage for properties named in the policy.
Dwelling Fire Insurance
Most homeowners policies require occupancy as a condition of the insurance. The fact that you visit infrequently may prevent you from obtaining full homeowners coverage. Dwelling fire insurance is an alternate coverage option utilized in insuring a second home, residential rental or non-owner occupied property. A dwelling fire policy continues to offer coverage for a home and other structures (for example: detached sheds or garages) for perils named in the policy. Named perils listed in a typical dwelling policy protect against damage caused by fire, collapse, lightning strike, wind, hail, explosion and smoke. Fore more coverage, consider adding personal property protection and liability insurance to a dwelling fire policy.
Renting Your Home To Others?
When it comes to renting the property, you will have little control over the physical damage that can occur. To help reduce your risks, tenant-occupied dwelling insurance will cover the costs incurred by damage, including fire, storms, burglary and vandalism. It does not cover your tenant’s personal property.
Renting your property furnished or unfurnished also adds insurance coverage complications. If you are renting the property furnished, let us know, We can advise you on the best coverage options and whether you should consider requiring longer-term tenants to carry additional renters insurance.
As with all homeowners insurance, it is important to be sure that you are insuring a second home properly. Contact us today to customize an insurance policy to best fit your unique needs.