Protecting Your Home Away from Home
Private Insurance: Ensuring Your Vacation Home is Properly Covered
When investing in a second home, it’s extremely important to understand a few insurance basics that can help you make the best buying decision. It’s essential to determine insurability and correctly estimate the ongoing cost of ownership when making the investment in a second home.
First, understand your coverage options. At a minimum, lenders require you to carry hazard insurance to protect your property against damage from theft, fire or other extreme events. It’s also a good idea to add liability insurance, which covers you and other household members for accidental injuries to your visitors. Opting for property plus liability insurance consists of a standard homeowners insurance package. For extra protection, a personal umbrella liability policy extends liability coverage for properties named in the policy.
Where you might run into problems is occupancy. Due to the fact that second homes often are uninhabited, it might be difficult to obtain full homeowners insurance. Therefore, dwelling fire insurance is an alternate coverage option for insuring your property. It typically covers against damage caused by fire, collapse, lightning, wind, hail, explosion and smoke. For additional coverage to dwelling fire, you can tack on personal property protection and liability insurance.
Lastly, whether or not you’ll be renting out your property plays a huge part in insuring a second home. When renting, you have little or no control over any physical damage that may occur. To properly manage your risk, tenant-occupied dwelling insurance covers things like burglary and vandalism, while not covering your tenant’s personal property.
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