Everyone enjoys a break from busy day-to-day lifestyles with an escape, but what better escape is there than a home away from home? A secondary home, also referred to as a vacation home, is an additional property that a homeowner buys at a different location from their primary residence. These properties are typically found in the mountains, by the ocean, by the lake, or simply in a different location than the owners’ primary residence. One thing that may trip up expectant secondary home buyers is the effect the additional property will have on a policy.
When you own a homeowner’s policy, it isn’t usually accepting of a secondary home since most people are not occupying the second home for more than a few months out of the year. While a secondary home policy is required when purchasing an additional home, it’s recommended to know what risks may affect this new policy. Some factors that can affect your policy include:
Replacement Cost: If the cost of the second home is more to replace than it is worth.
Vacancies: If the home is vacant for an extended period, it is at risk of being vulnerable to damage.
Location: Depending on how far or close your home is to emergency services can cause your rate to increase or decrease.
Rental: If the second home will be used as a rental, there will be the need for additional coverages such as landlord insurance.
Most secondary home policies come with limited coverage. Adding additional coverage to your policy is a must if you want to increase your protection. If adding additional coverage to your policy is a must, consider the following options:
Personal Property Coverage: Protect your belongings in case of a disaster that could damage your personal items. These items include furniture, clothing, appliances, or other personal items.
Personal Umbrella Policy: Coverage in the event if damage done to a second home is higher than the limits of basic home coverage.
Personal Liability: If you are found responsible for an injury to someone on your property who doesn’t live in either home, this coverage is there to help cover medical or court costs.
Flood Insurance: Normal homeowner’s insurance policies don’t combat flooding. Depending on the location of the second home, a lakefront property for example, it may cause a higher risk of flood or water damage.
Full Replacement Cost: Helps provide coverage for the full cost to rebuild your home if the total loss is up to 125% of the coverage limits of your policy. Depending on where the property is, there is the potential to receive up to 150% of costs.
If you are in need of updating your policies to include a secondary home, or you are interested in learning more about secondary home policies, contact one of your local insurance agents to discuss a quote!