How does a vacation home or vacant home insurance policy work?
A secondary homeowners insurance policy may protect your property, belongings, and assets like your primary home's insurance policy—even when you're not living in it or renting it out. Remember that secondary homes generally cost more to insure than your primary residence due to the additional risks involved, and coverage may be more restrictive than a homeowners insurance policy on your primary residence.
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Do you need a second homeowners insurance policy for a vacation home?
If you're financing a second home, be it a summer beach house, cabin, or vacation rental that sits vacant for long periods, your lender will require insurance for your vacation home to help protect their investment. Even if you have paid for your vacation home in full, it's a significant asset, so you may want to protect the property against damage from covered perils.
What does a second homeowners policy cover?
Homeowners insurance on a vacation home or other secondary residence usually provides the same coverage as the policy on your primary home. These coverages include dwelling coverage, which protects the home’s structure, other structures coverage for structures that aren’t attached to your home such as a detached garage or tool shed, personal property coverage, personal liability coverage, and more.
As with your principal residence, insurance on a secondary home may cover potential damage caused by fire, storms, and other perils. However, some secondary home insurance policies may only cover perils specifically named in the policy. In that case, any damage that occurs due to perils not named on your policy won't be covered. Learn more about what home insurance covers.
Does insurance work differently for a vacant home?
In most instances, a standard homeowners insurance policy won't cover damage to a vacant home. If your vacation home will remain unoccupied for several weeks, consider unoccupied home insurance, which is designed to provide coverage and protection even to unoccupied homes. Unoccupied or vacant homeowners insurance is ideal if you travel for multiple weeks, own a second home for seasonal living, or rent out a second home but are between tenants.
Why is insurance more expensive for a second home?
If you own a vacation home or beach house, insurance rates may be higher than the rate for your primary residence because of certain risks, such as:
Greater chance of burglary:
Since vacant or unoccupied homes are more likely to be targeted by intruders than occupied homes, the risk to your insurance company may be more prevalent.
Undetected hazards:
Homes that sit unoccupied can be more susceptible to damage such as leaks, burst water pipes, fires, and undetected mold.
Location risks:
Vacation homes are often located in higher-risk areas, such as near the beach where flooding and hurricanes are more likely to occur, or in remote, heavily wooded areas where forest fires may be an issue. Homes that are off the grid and have no running water or electricity don’t require special insurance but may also be riskier to insure because they're not easily accessible for emergency crews and/or other repair teams. They're also out of view of close by neighbors who wouldn't notice if something happens and no one is at the residence.
How do you insure a vacation rental home?
If you rent out your vacation home, an insurance policy is typically required if you finance the property, which can protect the home's structure as well as your belongings and assets. If you're renting out your residence once or twice a year, you may not need to make any changes to your homeowners policy, but it is a good idea to check your policy or contact your insurance company.
But if you end up renting your home to guests on a consistent basis (like renting your home through a short-term rental site), your insurer may require you to carry a different type of policy. Likewise, renting out your primary residence for an extended period may require landlord insurance.
How can you save money on homeowners insurance for your second home?
There are plenty of ways to save on vacation home insurance, including adding a home security system. Learn more about homeowners insurance discounts.
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