What coverage options are there?
At a minimum, your lender will require that you carry hazard insurance to protect your property against damage from fires, earthquakes, or severe storms. It is also a good idea to add liability insurance, which covers you and members of your household for accidental injuries to your visitors. Opting for property plus liability insurance adds up to a standard homeowners insurance package. For an extra layer of protection, a personal umbrella liability policy extends your liability coverage for properties named in the policy.
Renting out your home to others?
If you are renting out the property, you may have little control over the physical damage that can occur in or on it. Are you using Airbnb, Vrbo, Booking, HomeAway or other peer-to-peer accommodation site? Tenant-occupied dwelling insurance will cover the costs incurred by damage, including fire, storms, burglary and vandalism. It does not cover your tenant’s personal property.
Renting your property furnished or unfurnished also has insurance coverage implications. If you are renting your property furnished, make sure to let us know. Premiums may be based on your coverage options and whether you need to consider requiring longer-term tenants to carry additional renters insurance.
Considering the cost.
Whether your second home is reserved for your private use or shared as a rental, it costs more to insure than your primary residence. This is because premiums are based on a variety of factors; such as the amount of time that your home will be unoccupied, its location, and the liability from renting the property. Risk of hurricane, wildfire or even a pool can push up your premiums or make coverage difficult to obtain.
If you are considering the purchase of a second home, contact us to learn more about the cost of insuring the property.