Secondary Home Insurance

So you’ve finally purchased that vacation getaway that you’ve always dreamed about. One of the many things to consider with your new purchase is Secondary Home insurance. Many believe that the Homeowner’s insurance on their primary residence will cover the second home and its contents. But most Homeowner insurance policies have an owner-occupied clause which states that the owner must live in the home on a full-time basis. So if your second home is going to be used on a temporary basis for your personal vacations then things to consider include the following:

• The amount and type of insurance that you need for your second home will depend on how you plan to use it. If you’re planning on renting it to others for use through VRBO, Airbnb, or other rental services then you’ll need to purchase Short-Term Rental insurance. For purposes of this discussion, we’ll assume that your secondary home is only going to be used for your personal vacation needs. 
• Since a second home has many of the same needs as your primary residence, the insurance between the two will be very similar. To get the most comprehensive coverage available, you’ll want to ask for Guaranteed Replacement Cost coverage (coverage guaranteeing the replacement of the home even if doing so exceeds the limits on the policy) versus Actual Cash Value coverage (coverage for the cost of your house and the cost of your belongings in the house after deducting depreciation). 
• You should also consider the amount of liability insurance you’ll need in case someone is injured while visiting. In most instances, the liability insurance you purchase for your primary residence won’t apply to any claims made against you in your second home.
• And finally, you should decide whether you need to purchase any endorsements for your secondary home insurance policy. If you’re keeping jewelry in your secondary residence, then it would be best to purchase a rider to cover the replacement cost of your jewelry. Or perhaps you’ll need to consider a water backup endorsement to cover you in the event a sump pump fails. Additionally, earthquake and flood insurance should be purchased to fully protect your investment. 

The best way to determine what type of insurance you should purchase and which riders you should consider is to ask a licensed agent in our office. We can assist you with assessing your Secondary Home insurance needs and provide you with some quotes from several of the top insurance companies.