Do I need a second home insurance policy for a vacation home?
If you're financing a second home, your lender will require insurance for your vacation home to help protect their investment. Even if your vacation home is paid in full, it's a significant asset, so you'll want to protect the property against damage from covered perils.
What does a second home insurance policy cover?
A home insurance policy on a seasonal/secondary home usually provides the same coverage as the policy on your primary home. These coverages include the dwelling itself, other structures on the property, personal property, liability, and more. As with your principal residence, insurance on a seasonal/secondary home should cover potential damage caused by fire, storms, water, and other acts of nature. However, some seasonal/secondary home insurance policies only cover perils specifically named in the policy. In that case, any damage that occurs due to an event other than the named perils won't be covered.
How do I insure my vacation rental home?
If you rent out a vacation home, you'll need landlord insurance. Landlord insurance may cover damage to your property’s structure, personal liability, and loss of rent due to a covered loss.
Does insurance work differently for a vacant home?
In most instances, a standard homeowners insurance policy won't cover damage to a vacant home. If your vacation home is going to remain unoccupied for weeks at a time, consider unoccupied home insurance, which is designed to provide coverage for unoccupied homes. Unoccupied or vacant home insurance is ideal if you travel for multiple weeks at a time, own a second home for seasonal living, or rent out a second home but are in between tenants.
Why is vacation home insurance more expensive?
If you own a vacation home or beach house, insurance rates may be higher because it's considered a higher-risk property than your primary residence. There are various reasons second homes are deemed riskier, such as:
Greater chance of burglary:
Since vacant or unoccupied homes are more likely to be targeted by intruders than an occupied home, the risk to your insurance company is more prevalent.
Hazards are more likely to go undetected:
The location of the home can also impact home insurance rates for vacation homes. Vacation or summer homes are often located in higher-risk areas such as near the beach where flooding and hurricanes are more likely to occur, or in remote, heavily wooded areas where forest fires may be an issue. Homes that are off the grid and have no running water or electricity don’t require special insurance but may also be riskier to insure, as these homes rely on fireplaces or coal stoves for heat.