Owning a vacation home may be one of your big financial goals, and it’s important to make certain that your investment is protected. Having the right homeowners insurance can ensure that your vacation property is covered against damages from fire, wind, and other perils. In most cases you’ll need to purchase a separate policy to cover a second home. If your vacation home has a mortgage, your lender may require property insurance as a condition of borrowing.
- If you own a second home, you may need a separate homeowners insurance policy to cover it.
- Mortgage lenders may require a separate home insurance policy for vacation properties.
- The home’s age, condition, amenities, and location can influence the amount you’ll pay for a homeowners insurance policy.
- Additional insurance coverage may be needed if you plan to rent out your vacation or second home as a short-term rental.
What Is Vacation Home Insurance?
If you plan to buy a second or vacation home, you’ll most likely need vacation home insurance. This is a type of homeowners insurance policy that covers a home you own but don’t live in full time.
Vacation homes are typically viewed as being higher risk by insurance companies because they aren’t occupied all of the time. If you own a beachfront home, for example, the risk of theft or vandalism may be higher if you and your neighbors only visit periodically. Likewise, it may take longer to detect water damage with a second home that’s left unoccupied, which could increase the likelihood of the insurance company having to pay out a claim for damages.
Vacation home insurance is not the same as vacant home insurance, which covers properties that remain empty for extended periods of time.
What Does Vacation Home Insurance Cover?
A vacation home insurance policy isn’t exactly identical to traditional homeowners insurance, as the home isn’t being lived in all the time. Instead of covering all the things that a typical homeowners policy might cover, your insurance company may build your policy around named perils only.
This means the policy for your second home will list a specific set of events that are covered, which may include damage from:
- Fire and smoke
Liability coverage may also be included, which would cover any personal injuries sustained by someone while they’re on the property. The policy could include medical payments coverage as well to pay for someone’s medical bills if they’re injured. Still, it’s possible that if you already have a homeowners insurance policy in place for your primary residence, your insurer could extend those coverages to a vacation or second home.
When purchasing vacation home insurance, take time to read your policy’s home insurance declaration page, which explains the details of the property being covered, your coverage limits, deductibles, and premiums.
How Much Does Vacation Home Insurance Cost?
Vacation home insurance could end up being more expensive than your regular homeowners insurance, depending on the type of