Vacation Home Insurance Guide
Are you thinking about purchasing a vacation home, such as a lake house? If so, you’ll need to learn about secondary home insurance, and this guide will likely answer many of your questions.
Purchasing a second home is similar to buying your primary residence. However, there are unique aspects to consider, especially when choosing an insurance policy. Homeowner’s insurance on a second home is meant to protect your dwelling in case of certain natural disasters or other accidents.
Can You Have Homeowners Insurance on Two Homes?
Possibly. When looking to insure a second home, you may want to see if your primary homeowner’s insurance policy can cover a second dwelling. If so, then you will likely not need a secondary policy. However, if the coverage only insures your primary residence, then you will need a second home insurance policy.
According to Nolo, a second home is a house or condo that you live in for at least part of the year as compared to your primary place of residence. It is often considered a vacation home but can also be a place you conduct business.
However, to qualify for a secondary home insurance policy, this investment needs to be either in a vacation or tourist region or a significant distance from your main residence.
What Is a Vacation Home and Second Home Insurance?
A vacation home will need to be protected, especially since you don’t want to face the significant financial issues of rebuilding or fixing damages after a natural disaster. A secondary home insurance policy will put your mind at ease knowing you have the proper coverage.
A vacation or seasonal home insurance policy will protect against fire, wind, and other disasters. Vacation home insurance is a type of coverage that will protect a home you’ve purchased but do not reside in full time, according to Investopedia.
You will want to check your primary homeowner’s insurance policy to see if it can cover a vacation home as well. If it does cover a second residence, then you will not need a second policy. If not, you will need to purchase an additional policy for your vacation home.
What Is and Isn’t Covered Under Secondary Home Insurance
You will likely need to purchase a vacation or summer house insurance policy, especially if you have a mortgage. Most lenders make this a requirement.
What is covered under a secondary home insurance policy? This policy is not identical to your primary homeowner’s coverage since you won’t live in your vacation home year-round. Likely, it will cover only specific issues, such as:
- Burglary
- Fire/smoke
- Lightning
- Flooding
- Explosions
However, if you buy a dwelling policy, then property damage and theft will be the only things covered. As such, a dwelling policy would not cover some of the major issues related to natural disasters, such as roofing issues or a flooded basement.
Often, homeowner’s insurance on a second home only covers “named perils.” Therefore, anything not listed will not be covered in the policy.
How Expensive Is Insurance on a Second Home?
Vacation home insurance costs could be higher than the premium cost at your primary residence. Many insurance policies have a price increase for vacation homes.
The higher cost may be due to the proximity of your home to emergency services, such as the fire department. Often, beach houses, lake houses, or cabins are farther away from the police, fire department, or hospitals.
A beach house insurance policy can also be more expensive since beachfront properties sometimes have higher values and therefore are more expensive for insurance companies to cover in the case of a claim. The costs are high due to the chance of flooding and hurricanes, while homes at risk of tornadoes are also likely to cost more.
In 2021, the average cost of home insurance is $1,312 or approximately $109 per month, based on a policy coverage limit of $250,000. When looking at how to lower insurance premiums on a second home, there are several steps you should take. For example, bundle it with other insurance policies, such as your auto insurance and coverage for your primary place of residence. Doing so will help lower your premiums. In addition, it is always good to compare 2 or 3 quotes from different insurance companies. Using an independent agent can save you time and money as they have many companies to offer and can do the comparison for you.
How Is a Seasonal Home Different From a Secondary Home?
Your insurance company may also have different definitions for a seasonal home versus a secondary residence. Essentially, two different categories of vacation homes exist. A secondary home is one where you reside only for a short while every year.
A seasonal home is one where you stay for a longer period but only at certain times of the year, such as summertime or during the holiday season. Seasonal vs. secondary home insurance can differ in costs and the type of coverage provided.
These definitions and the difference between seasonal and secondary home insurance can impact the overall price of your insurance policy. As such, be sure to speak with a specialist to get the best price and coverage for your property.
Types of Vacation Homes Covered by Insurance
The different types of vacation homes that will be covered by a secondary home insurance policy or homeowners insurance for two homes include:
- Beach houses
- Cabins
- Lake houses
- Cottages
Whether you want to spend your vacations at a lake, a beach, or in a cabin in the woods, be sure you have the right insurance policy for your vacation home.
How Doyle & Ogden Insurance Advisors Can Help
At Doyle & Ogden Insurance Advisors, you can speak with our specialists to learn which secondary home insurance policy is right for you. As an independent agent, we offer over 10 companies to compare. We ask the right questions and give you the best coverage at the right price. Michigan homeowners throughout the greater Grand Rapids region rely on our experience and expertise to protect their homes. Contact us today to get started.
