If you’re investing in a second home, we’ve gathered some insurance basics that will help you make the best buying decision when it comes to determining insurability and estimating your ongoing cost of ownership.
At a minimum, your lender will require that you carry hazard insurance to protect your property against damage from theft, fire, flooding and windstorms. It’s also a good idea to add liability insurance— which covers you and members of your household for accidental injuries to your visitors. For an extra layer of protection, a personal umbrella liability policy extends your liability coverage for properties named in the policy.
Dwelling Fire Insurance
Since most homeowner policies require occupancy as a condition of insurance, the fact that you visit infrequently may preclude you from obtaining full homeowners coverage. Dwelling fire insurance is an alternate coverage option utilized in insuring residential rental or non-owner occupancy property, including vacant property. A dwelling fire policy continues to offer coverage for a home and other structures (e.g., detached sheds or garages) for perils named in the policy. Named perils listed in a typical dwelling fire policy protect against damage caused by fire, collapse, lightning, wind, hail, explosion and smoke. For more coverage, consider adding personal property protection and liability.
Top Ways to Save
If your second home is typically unoccupied for periods of time, it’s worth investing in items that create insurance discounts to offset the cost of your premium. This includes smoke detectors, fire extinguishers, deadbolts and a central alarm system for burglaries and fire that contacts an outside service.
Second homes generally cost more to insure. This is because premiums are based on a variety of factors such the amount of time that it will be unoccupied, its location and the liability from renting the property.
Often the qualities that attracted you to your second home—such as its location— are the same ones that can make insuring it more costly. Depending on the location and features of a second home, the risk of natural disaster, or even the presence of a pool, you may find coverage difficult to obtain. If you’re considering the purchase of a second home, contact us to learn more about the cost of insuring the property.