So you’ve decided to take the leap and purchase a vacation home. With all the things you need to consider, how you are going to insure that home is just one of them. However, depending on your intended use for the vacation home, the type of insurance you need will be very important.
What type of policy do you need for your Vacation Home?
Oftentimes the term “vacation home” can be used to mean a few different things. If you are purchasing a vacation home that will be used solely by your family and not rented out to others throughout the year then you will most likely need a “seasonal” or “secondary” home insurance policy. This type of policy will provide coverage for the dwelling of your vacation home, the contents of the home, liability and MedPay claims, and more.
On the other hand, if you intend to rent out your vacation home to others for vacation purposes you will need a “landlord” or “rental” home insurance policy. This type of policy is unique in that it typically provides coverage for the dwelling of the home however it offers flexible coverage options for contents and liability limits depending on your specific use for the home. Also, it usually provides additional coverage for loss of rental income in the event the home is damaged in a covered claim and you are unable to rent it out in the meantime. This coverage can be critical if you depend on the rental income to cover the mortgage payments on the home.
Consider Flood Insurance if Not Required
If your vacation home is located near a coastline or major body of water and you have a mortgage, you may have no choice in this department. Your lender may require that you carry a flood insurance policy to protect the home in the event of a flood since flood coverage is not provided under a standard homeowners insurance policy. However even if your lender doesn’t require a flood policy (or if you don’t have a mortgage) you should consider getting a flood insurance policy for your vacation property just as you would for your primary residence. Even just a few inches of flood water can do a devastating amount of damage to your vacation home so talk to your agent about how much coverage they recommend.
Vacation homes can get discounts too
If you currently take advantage of homeowners insurance discounts on your primary home policy you might be wondering if the same types of discounts apply for your vacation home. The good news is that typically they do! Most carriers will reward you with policy savings if you have multiple policies with them- for example, if you insure your primary home with them as well. Also, if you have a superior credit-based insurance score and/or if the home is equipped with safety devices such as central fire and burglar alarms you can save additional money as well.
For more information on vacation home insurance talk to your HomeInsurance.com agent.