Southern Insurance Associates
by AJaye Brown on Nov 09, 2015
SPECIAL HOMEOWNERS INSURANCE PROTECTION
A vacation home can be a wonderful luxury and sometimes even a good investment, but there are some important factors to consider before making the leap into second-home ownership—such as insurance costs. Just like your primary home, you’ll need to insure your vacation home against burglary, fire, weather damage, liability and other risks. Because insurance can add significantly to the price of buying and owning a vacation home, you may want to consider the likely insurance costs before deciding on a specific property.
Key Factors Impacting Vacation Home Insurance Costs
For a number of reasons, insurance for a vacation home can be more expensive than the coverage on your primary residence. Notably, your second home may often be unoccupied, putting it at greater risk for theft, vandalism and undetected damage, like burst water pipes. When you shop for a vacation home, it’s important to recognize that the following factors will impact your insurance costs:
In addition, if the home is located in a flood zone, you’ll be required to purchase a separate flood insurance policy. Flood damage is not covered by standard homeowners insurance policies, but coverage is available from the National Flood Insurance Program (NFIP) and from some private insurance companies. The cost of NFIP flood insurance for second homes has been increasing and there are also special surcharges that you will be required to pay. You can check the cost of flood insurance for a specific location by going to www.floodsmart.gov. You can also lower your insurance costs by choosing a location with less risk—for instance, further from the beach, down the mountain or in a gated community where there is security.
Ways to Save on Second Home Insurance Costs
While the price of insurance will increase the total cost of ownership of a second home, there are steps that you can take to help make insurance more affordable:
Will You Rent Your Property?
If you plan to rent your vacation home to others, your homeowners insurance costs will likely increase, and you may need to purchase additional coverage. Your insurance needs will depend on how often you rent out the property and for how long. For a one-time short-term rental, you may be able to add a simple extension (an “endorsement”) to your existing homeowners policy. On the other hand, if you plan to regularly rent out your second home, you may need separate business coverage or a landlord policy. While some rental services, such as Airbnb and VRBO, offer coverage for homeowners, it’s important to read the fine print to determine limits and exclusions.
Because renting your second home entails additional, more complex risks, it’s a good idea to consult with your insurance professional. For more information, read the I.I.I.’s article, “What Type of Insurance Do I Need If I’m Renting out My Home?”
You’ll probably be furnishing your new vacation home as well as keeping clothing and equipment there to use when you visit. To help keep track of your possessions and file an insurance claim if necessary, create a home inventory with all of the items you’ll be keeping in the house. The I.I.I. provides a free Web- and app-based inventory tool, Know Your Stuff®, which makes it easy to store information and photos of your possessions, all in one place. The tool also allows you to set up various homes, each with their own inventory, and move items from one to the other.
Call Southern Insurance Associates, LLC in La Fayette, GA to discuss your Vacation Home insurance at 706-996-8788 or Info [at] SouthernInsuranceAssociates [dot] com. Call us; we're happy to help!
Southern Insurance Associates
408 N. Main Street
La Fayette, GA 30728
9AM - 5PM Mon - Fri