UPDATED: DECEMBER 30, 2022 | 3 MIN READ
If you own a vacation home or any type of second residence, you want to protect that property as much as possible so that you can enjoy it for many years to come! As with your main residence, a homeowners insurance policy is vital for a second home, no matter how often it’s visited throughout the year and its overall value.
While maintaining a homeowners insurance policy is important for your second home, you might wonder what policies are recommended, if there is additional coverage to consider for a home that’s often vacant, and the differences between condo insurance and coverage for a standard home.
What are the most important home insurance coverage options?
While there are many forms of insurance you can purchase for a residence, note the most important forms of coverage and what these policies cover:
- A homeowner or dwelling policy reimburses the cost of repairing or rebuilding a structure in the event of a fire or other disaster.
- Personal property insurance reimburses the cost of items inside the dwelling not covered by your homeowners policy. These items would include kitchen appliances, furniture, and your personal belongings.
- Liability insurance reimburses the cost of medical bills and property damage for which you’re responsible; for example, if someone were to fall in your home, liability insurance would pay the costs of their resultant medical care.
Will your current homeowners policy cover two homes?
It might! Before you shop for additional insurance for that vacation condo, check with your insurance agent about your current coverage! Your current homeowners insurance policy might cover a second home, depending on the policy itself.
Even if you need to add some coverage for your second home, it might be cheaper to rewrite your current policy than to buy a new one altogether.
How is condo insurance different than standard homeowners insurance?
A condo owner typically needs what is called a walls-in policy. As the name implies, a walls-in policy covers damage to the condo starting from the interior walls inward. If your second home is a condo, an apartment in a co-op, or another interior unit, ask your insurance agent if you only need a walls-in policy.
A homeowners or dwelling insurance policy covers costs for repairing an entire structure, including its roof, interior plumbing, and attached porches or decks.
However, most condo owners are only responsible for repairing their unit. In contrast, damage to the building’s roof and outside areas, including plumbing between units, is often the responsibility of the HOA or condo association.
Do you need homeowners insurance if you pay an HOA fee?
In short, yes. If you pay a homeowners association or HOA fee for your second home, never assume that those fees include insurance for your residence.
Your HOA fees might cover the cost of an insurance policy for common areas of a condominium complex and exterior surfaces. However, those fees rarely provide insurance coverage for each unit in a complex.
If your second home is an attached unit of any sort, meaning an apartment, condo, or townhouse, you must understand the repairs for which you’re responsible in case of a storm or other disaster.
Your HOA agreement should outline what your fees include and even suggest the insurance types needed for your unit. Your insurance agent can also help you decide the best policy for an attached property.
Are there special considerations for coastal homes?
Ask about hurricane and windstorm damage limitations if your second home is on the coast or in the tropics. Some homeowners insurance policies offer limited coverage for hurricanes and storm damage in coastal areas if any. You might want to purchase additional hurricane or storm damage coverage.
It’s also suggested that you discuss ways of lowering your insurance costs for your coastal home with your agent. Installing hurricane shutters, thick window film, roof coatings and sealants, and other such measures might provide added protection against storm damage and, in turn, lower your insurance costs for your coastal home.
What if the second home is rented out sometimes?
If you rely on the rental income from your second home, consider obtaining “loss of use” or fair market value insurance for the property. This insurance reimburses you for lost rent while the structure is repaired or restored after a disaster. Some loss-of-use policies also reimburse your tenants a small amount for their moving expenses. You might also need short-term rental insurance to cover gaps when the home is vacant.
Are my tenants’ belongings covered?
Ensure your tenants understand that their personal belongings aren’t covered under your homeowners insurance policy. Tenants might want to carry renters or personal property insurance for themselves, so they have reimbursed the cost of damages to their items if something happens to your rental unit.
Can you buy multiple insurance policies for a home?
If you’re worried about coverage limits from your current homeowners policy, ask your agent about added coverage or separate, additional types of coverage.
For example, you might purchase an additional policy that specifically covers vacant property vandalism or damage caused during a break-in if your second home is left vacant for many days or weeks throughout the year.
It’s not illegal to buy multiple insurance policies for a home but note that you legally cannot profit from homeowners insurance reimbursement. Don’t assume that you can buy several policies from different companies and then make a claim with all of them after a fire or storm, as doing so might be considered insurance fraud!
Does a second home insurance policy cover items stored at the home?
Never assume that your homeowners policy covers damage to a boat, ATV, trailer, business equipment, or other items stored at your second property. In many cases, you need separate policies for boats and vehicles, and equipment used for a business may require a commercial insurance policy.
Ask your insurance agent about anything of value stored at your second home rather than assuming those items are covered under your homeowners insurance.