Insuring Your Second Home

There’s a lot to consider when deciding to purchase a second home.

Do you want it to be close to the ocean or in the mountains? Do you want to use it exclusively as a family vacation home or rent it out for extra income?

Regardless of where you decide to buy and how you choose to use your second home, you’ll want to be sure that it is protected.

With the right policies in place, you can rest assured that your vacation home is covered, whether you are there or away.

Insuring Your Second Home

Homeowners coverage for a vacation home can provide all the same types of protection that you would expect with your primary homeowners policy. However, there are some unique factors associated with vacation homes that affect the risk for insurers, including:

Vacation Home Location

It is not uncommon for a second home to end up being in an area that comes with more risks.

While long walks on the beach and the sound of waves lapping at the shore make a beach house the ideal vacation home, it comes with a set of risks specific to the being by the ocean. A beach house is more likely to be damaged by high winds, hurricane damage, or flooding then a home further inland.

Maybe your ideal vacation home is a lake house nestled in a shady forest: a location that leaves your home much more vulnerable to flooding and wildfire perils.

You’ll want to be sure to opt for additional coverages when choosing a higher risk location for your second home or you’ll end up having to foot the bill if disaster strikes.

Insure your second home with:

Named Peril Coverage
Typically covers losses from events such as windstorm, hail, and fire damage, named peril coverage offers coverage for the perils specifically named in your policy.

Flood Insurance
Even an inch of water seeping into your home vacation home can end up costing you. A lot.

According to Home Advisor, the average homeowner spends $7.00 per square foot for professional cleanup when their home floods. Just the cleanup. That price doesn’t account for the repairs that will surely be necessary.

Avoid being having to foot the bill for clean-up and repair costs – which can add up fast – flood insurance coverage.

High-risk Fire Insurance
Depending on where your home is located, it may be difficult to get fire insurance. That’s where Aegis comes in.

Located in the heart of the Sierra Nevadas – in an area at high risk of fire – Aegis specializes in high-risk fire insurance.

For nearly two decades, Aegis’ insurance agents have developed relationships with carriers who don’t shy away from high-risk properties, who have the financial solvency to survive a devastating fire season, and who are able to keep premium payments reasonable for homeowners.

 

Property Type

Something else you consider when choosing your second home is what type of property you want to purchase:

• single-occupancy house
• condominium
• townhome

A condominium in Palm Desert is less likely to suffer losses than a stand-alone home, being maintained by a homeowners association year-round, whether you’re there or not.

Regardless of what type of property you choose for your second home, you will need coverage that can help you pay should the unexpected occur.

Insure your second home with:

Comprehensive Property Coverage
Helping to pay for damage to your vacation house, comprehensive property insurance offers coverage for most perils that aren’t excluded – such as flood or earthquake coverage – from your policy.

Unoccupied Residence

The fact that your home will sit empty for long periods of time means that it runs a higher risk of:

• Burglary
• Vandalism
• Unnoticed, prolonged damage (like water damage)

Perhaps some teenagers decide to break in and throw a party, breaking a window, damaging furniture, staining the carpet, and goodness knows what else.

It’s bad enough being violated by such an intrusion, but having to pay for cleanup and repairs just adds insult to injury.

Insure your second home with:

Occasional Rental Endorsement (or Short Term Rental)
Protecting you against financial losses due to vandalism, malicious mischief or other risks, occasional rental endorsement helps cover the cost when the unexpected occurs while your second home sits vacant or unoccupied.
 

 

Amenities

You’ve spent a long day skiing and can think of nothing better than sinking into the hot tub at your vacation chalet. While this might be the ideal way to vacation it does come with some added risk.

Pools and spas can increase the risk of someone sustaining an injury on your property, and they aren’t your only concern.

Additional amenities that could increase risk include:

• exercise equipment
• tennis courts
• basketball courts
• small watercraft
• bicycles

Imagine you and a friend are swimming when she hops out of the pool and runs over to the spa, slipping and hitting the ground hard. An ambulance trip and hospital bill later, that friend is now looking at you to pay the bill.

And if you don’t feel that it’s your responsibility, she could end up taking you to court.

Be sure you’re properly insured so you don’t end up having to pay out if someone is injured while recreating at your second home.

Insure your second home with:

Liability Coverage
Offering protection from financial losses should a third-party suffer bodily injury or property damage while at your vacation home, liability coverage also helps pay the costs for lawsuits in the event that someone is injured or property is damaged on your second property.

Rental Property

If your vacation rental property is working as an investment and suffers a covered loss, time spent on clean-up and repairs can mean income lost.

Time spent waiting for vandalized property or a roof damaged by wind to be repaired is time when you can’t rent out your second home.

But you don’t have to suffer financial loss on top the inconvenience you’re already going through.

Insure your second home with:

Loss of Rents
If your second home is affected by a loss that is covered, you may not be able to rent it out for while clean-up and repairs take place.

This is where loss of rents insurance comes in to help cover the lost gross rental income until you’re able to turn the keys over to renters again.

Whether you’re buying a second home to enjoy exclusively with family and friends or you intend to use it as a vacation rental to generate income, you are going to want comprehensive coverage that protects you from the host of possible losses that can come along with owning a second home.