Have A Second Home In The Mountains? Is It a Vacation Home or a Vacant Home

Many fortunate families have two homes, one primary residence and the other may be a vacation home. But are you aware of the insurance differences? Do you know at what point a vacation house becomes a vacant house? There are some fine differences between the two and a mistake can lead to not having the insurance coverage you thought you had.

 Your vacation home is an extension of your primary home and many times a vacation home can be added as an extension of your existing homeowner’s policy.  Why do you need second home insurance? The reasons are many.  

 Do you have a mortgage? Many times the mortgage lender will require insurance. Of course it just makes since to protect your investment from fire, flood or break-in or worse. Take this time to sit with your insurance broker and go over your coverage for both homes.

 Some tips to look for when shopping for homeowner or vacation home insurance.  See if your current home owner’s policy extends liability coverage to the second home. Make sure the policy has adequate accident coverage; generally you want more with a rental or vacation home. If you rent your second home premiums can run twenty percent higher. Check to be sure the policy covers hurricane, storm and water damage. Flood insurance will need to be purchased separately. Consider an Umbrella policy to extend your liability.

 Some steps you can take to save on your second home insurance. Install an alarm system, if you can, also get one that detects fire or power failure.  Put up a fence. Keeping things out of the yard in the first place is always a good defense. Is your home in a gated community? This is good for an insurance discount. Is the second home a condo? Condos have their own special considerations. For example the association usually carries insurance to cover the building but most times will not cover your contents.

 Vacation homes are just that, vacation homes, which means that for some time during the year the home is vacant. So then, the next question is at what point does a vacation home become a vacant home? The answer to that will differ with insurance providers so be sure to check. General rule is thirty days. At that point the home is considered vacant and the home owner or second home policy no longer applies.

 Insurance companies see vacant homes in a completely different light and assign a much higher risk value.  The reason for this is simple, vandalism, theft, fire, water, storm damage are more likely in a vacant home. Also, because nobody is home to report or stop the damage it is likely to be worse. The next big reason is liability. An empty yard just seems to attract an array of possible hazards from kids to trees. Depending on your conditions and insurance carrier premiums can get pricy. In fact if the conditions are right it may be less expensive to keep the house occupied.

 Some things you can do to control cost are similar to homeowners’ insurance like set a higher deductable or bundle your policies. In the home itself install an alarm or make home improvements like upgrades to wiring and plumbing for example.

 There you have it, the differences between a vacation home and a vacant one. It pays to know the fine print in your current policy to know how long your home can be empty before being considered vacant and avoid any surprises.

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