If you own a vacation home or any type of second residence, you want to ensure you protect that property as much as possible so that you can enjoy it for many years to come! As with your main residence, a homeowner’s insurance policy is vital for a second home no matter how often it’s visited throughout the year and no matter its overall value.
While maintaining a homeowner’s insurance policy is important for your second home, you might wonder what policies are recommended, if there is additional coverage to consider for a home that’s often vacant, and the differences between condo insurance and coverage for a standard home.
What are the most important home insurance coverage options?
While there are many forms of insurance you can purchase for a residence, note the most important forms of coverage and what these policies cover:
- A homeowners or dwelling policy reimburses the cost of repairing or rebuilding a structure in the event of a fire or other such disaster.
- Personal property insurance reimburses you the cost of items inside the dwelling, not covered by your homeowners policy. These items would include kitchen appliances, furniture, and your personal belongings.
- Liability insurance reimburses the cost of medical bills and property damage for which you’re responsible; for example, if someone were to fall in your home, liability insurance would pay the costs of their resultant medical care.
Will your current homeowners policy cover two homes?
It might! Before you shop for additional insurance for that vacation condo, check with your insurance agent about your current coverage! Your current homeowner’s insurance policy might cover a second home, depending on the policy itself. Even if you need to add some coverage for your second home, it might be cheaper to simply rewrite your current policy than buy a new policy altogether.
How is condo insurance different than standard homeowner’s insurance?
A condo owner typically needs what is called a walls-in policy. As the name implies, a walls-in policy covers damage to the condo starting from the interior walls inward. If your second home is a condo, an apartment in a co-op, or other such interior unit, ask your insurance agent if you only need a walls-in policy.
A homeowner’s or dwelling insurance policy covers costs for repairing an entire structure, including its roof, interior plumbing, and attached porches or decks. However, most condo owners are only responsible for repairing their own unit, while damage to the building’s roof and outside areas, including plumbing between units, is often the responsibility of the HOA or condo association.
Do you need homeowners insurance if you pay an HOA fee?
In short, yes. If you pay a homeowner’s association or HOA fee for your second home, never assume that those fees include insurance for your residence. Your HOA fees might cover the cost of an insurance policy for common areas of a condominium complex and for exterior surfaces but rarely do those fees provide insurance coverage for each individual unit in a complex.
If your second home is an attached unit of any sort, meaning an apartment, condo, or townhouse, it’s vital that you understand the repairs for which you’re responsible in case of a storm or other disaster. Your HOA agreement should outline what your fees include and even suggest the insurance types needed for your unit. Your insurance agent can also help you decide the best policy for an attached property.
Are there special considerations for coastal homes?
If your second home is on the coast or in the tropics, ask about limitations on hurricane and windstorm damage. Some homeowner’s insurance policies offer very limited coverage for hurricanes and storm damage in coastal areas, if any. You might want to purchase additional hurricane or storm damage coverage.
It’s also suggested that you discuss ways of lowering your insurance costs for your coastal home with your agent. Installing hurricane shutters, thick window film, roof coatings and sealants, and other such measures might provide added protection against storm damage and, in turn, lower your insurance costs for your coastal home.
What if the second home is rented out sometimes?
If you rely on the rental income from your second home, consider obtaining “loss of use” or fair market value insurance for the property. This insurance reimburses you for lost rent while the structure is being repaired or restored after a disaster. Some loss of use policies also reimburse your tenants a small amount for their moving expenses.
Are my tenants’ belongings covered?
Ensure your tenants understand that their personal belongings are not covered under your homeowner’s insurance policy. Tenants might want to carry renter’s insurance or personal property insurance for themselves, so they are reimbursed the cost of damages to their own items if something should happen to your rental unit.
Can you buy multiple insurance policies for a home?
If you’re worried about coverage limits from your current homeowner’s policy, ask your agent about added coverage or separate, additional types of coverage. For example, you might purchase an additional policy that specifically covers vacant property vandalism or damage caused during a break-in, if your second home is left vacant for many days or weeks throughout the year.
It’s not illegal to buy multiple insurance policies for a home but note that you legally cannot profit from homeowner’s insurance reimbursement. Don’t assume that you can buy several policies from different companies and then make a claim with all of them after a fire or storm, as doing so might be considered insurance fraud!
Does a second home insurance policy cover items stored at the home?
Never assume that your homeowner’s policy covers damage to a boat, ATV, trailer, business equipment, or other such items stored at your second property. In many cases, you need separate policies for boats and vehicles, and equipment used for a business specifically may require a commercial insurance policy. Ask your insurance agent about anything of value stored at your second home rather than assuming those items are covered under your homeowner’s insurance.