Second Home Insurance: Protect Your Vacation Home

What is second home insurance?

Purchasing a second home to enjoy warmer winters or summers close to the beach is appealing, but it comes with its own set of risks. While second home insurance provides protection similar to primary home insurance, it’s typically more expensive and restrictive than standard homeowners policies due to the risks associated with owning a second home.^[1]

For example, second homes are often in risk-prone areas, such as waterfront locations. Additionally, second homes are more likely to remain vacant for extended periods, increasing the possibility of undetected hazards, such as mold and burst water pipes, and opportunities for burglars.

Like a traditional homeowners policy, second home insurance covers your property and personal belongings against damage and liability. The premiums can be expensive, which is why comparing quotes from multiple insurers is crucial.

Other ways to lower the cost of second home insurance are to bundle your policies with a single insurer and install an alarm system. Depending on your situation, you may want to consider adding umbrella and rental loss coverage for extra protection.

What does second home insurance cover?

Second home insurance provides similar protection to primary home insurance, including:

Dwelling

Dwelling insurance helps cover damage to your home’s physical structures from a covered peril.

Personal property

Personal property coverage reimburses you for the value of electronics, furniture, and other possessions damaged or lost due to a covered peril.

Liability

Liability coverage helps pay costs if someone sues you for an injury that occurred on your property.

If you rent out your second home, you’ll also want to consider landlord insurance.

What does second home insurance exclude?

While secondary home insurance covers a variety of situations, there are some common exclusions to be aware of, such as:

• Floods: Second home insurance policies often don’t provide coverage for flood damage. If your property is located in a flood-prone area, such as a beach house, it’s important to purchase separate flood insurance to protect your home.

• Earthquakes: Second home insurance may not cover damage caused by earthquakes. Some insurers offer earthquake insurance as an add-on to your existing insurance, while others offer it as a stand-alone policy.

• Wear and tear: Second home insurance typically covers sudden and accidental damage, but it may not cover damage that occurs over time due to normal wear and tear or lack of maintenance.

  Important Information

  Just 1 inch of floodwater can cause more than $25,000 in damages to a home, according to the Federal Emergency Management Agency.^[2]

How much does second home insurance cost?

Generally, second home insurance costs may be higher than insurance on your main residence due to the increased risk factors associated with second homes. Landlord policies typically cost 25% more than standard homeowners insurance policies, according to the Insurance Information Institute.^[3] However, the exact cost of your policy will depend on several factors, such as the location, usage, and specific coverage requirements of your property.

Factors that affect the cost of second home insurance

The following factors may affect the costs of insuring a second home:

• Location: The location of your second home can affect the cost of your insurance. If your property is in an area prone to natural disasters, such as hurricanes or wildfires, your insurance premiums may be higher.

• Vacancy: If your home is vacant for stretches of time, it increases the risk of burglary, squatters, and undetected hazards, such as water leaks.

• Amenities: Having a pool or hot tub increases your liability exposure and may result in higher insurance premiums to balance out the extra risk.

• Rental risks: If you rent out your home as a short-term vacation rental, you have an increased risk of damage and liability.

Do you need second home insurance?

Almost all property owners will benefit from insurance on their second home. Additionally, if you have a mortgage on your second home, the lender may require you to have insurance on the property as a condition of the loan. Depending on the location of your second home, the lender may also require flood insurance.

How to get cheap second home insurance

Buying a second home insurance policy involves three basic steps:

1. Determine your insurance needs.

2. Get quotes from multiple insurance companies.

3. Choose the policy that best meets your needs.

Comparing policies from multiple home insurance companies can help you find the best deal. The Insurance Information Institute suggests getting at least three quotes for second home insurance and reviewing your policy before your annual renewal to see if better rates are available.

Some other ways to save on second home insurance are to bundle your primary home insurance and second home insurance policies and install security features, such as burglar alarms and deadbolt locks. Safety measures like sprinklers and water leak detectors may make you eligible for discounts.