When owning or renting a vacation home, it is important to make sure it is insured adequately. There are the same odds of a fire or other disaster if not more than with a primary residence.
Vacation home insurance protects homes and possessions from perils such as fire, lightning, storm damage, burglary and vandalism. If a vacation home is located in an area with severe weather concerns, it will need enough coverage for those concerns. If a home is located in an area that is prone to flooding, it will need a separate flood insurance policy. Earthquake coverage is also not covered by a standard policy, thus it will need a separate policy. It is also important to have liability insurance to cover losses from slips and falls, dog bites and other accidents that could occur on the home’s property.
Similar to a standard home insurance, vacation home insurance premiums are largely based on the value of a home, and if the home is more prone to disasters such as flooding, earthquakes, forest fires and others events.
A vacation home’s insurance may cost more to insure a primary residence for a variety of reasons. Vacation homes may be more susceptible to burglars and vandals since they are not necessarily occupied for long periods of time. Since it is unoccupied a majority of the time, damage caused by storms or thieves may not be noticed for months. If damage is not determined for a long period of time, there may be additional damage caused after the initial accident. A discount may be offered if there is someone that routinely checks on the home and there are people in the vicinity to discourage burglars and vandals.
There may be some ways to keep the cost of the vacation home insurance reasonable. For example, lower rates may be bundled into the policy with other insurance policies with the same company. Also, check with your agent to see if they offer non-smoking discounts, senior discounts or loyal customer discounts. A safety discount may be offereed if you have security systems, especially systems that alert agencies such as a security company or the local law enforcement. There may be discounts for brand new homes or homes that have up-to-date electrical wiring, HVAC system, plumbing and other updates. Homes with older electrical and plumbing have a greater chance of fires or water leakage problems.
A higher premium of up to 20 percent higher may be charged if a vacation home is rented out. This is because owners may be there even less than most second-home owners. Moreover, due to this, insurers feel a vacation house is in even greater risk. Also, other people may not take as good care of the property as the owners. On the other hand, some companies offer discounts if there will usually be tenants around; this is because an occupied house is less likely to be burglarized. When a home is occupied more, it is more likely someone will be present in the event of a fire or other disaster.
There are some things to consider when insuring your vacation home.