What You Need To Know
Owning a vacation home can be a great investment. It’s a second home that you can go to over holiday breaks, the summer or whenever you just want to get away from it all. Second-home insurance covers another property that is not your primary residence. It is basically the same as your primary home insurance with coverage for your property and possession from fire, theft, and disaster-related damages. It also has personal liability coverage for injuries caused by accidents in your home.
Here are some things to consider when looking to purchase that second home you’ve been dreaming about.
Renting Out Your Property:
Before purchasing insurance, you will first need to decide if your secondary home is a true vacation home or if it is going to be rented out. Renting out your vacation home to others, will likely increase your risk and therefore increase your premiums, and you may need to purchase additional coverage. If you rent your house out through programs like Airbnb or VRBO you will typically want to purchase insurance from them as well.
Factors that will determine which type of insurance policy you need to buy:
• How many months per year will your home be occupied
• Are you renting it out on a short-term or long-term basis
• How many months total per year will you rent out your home
Key Factors That Impact Vacation Home Insurance Costs:
While the homeowner’s policy for your second home will provide the same types of coverage as your primary homeowner’s policy, the following factors will likely impact your insurance costs:
Location
With Location is always a factor in homeowners insurance costs. With vacation homes, the very location that makes a place desirable may also make it more expensive to insure. Location-based risks will impact the price of coverage, and in some cases, may even incur higher deductibles.
Property
As with any house, the age and type of building materials used in a vacation home will impact the cost of insurance. Make sure you investigate when updates were last completed especially on major items: roofs, electrical, plumbing and HVAC system.
