Many people and families hope to one day have a second home in addition to a primary residence — whether a seasonal house they divide their time between or a vacation home they stay in a few times a year.
Planning for that objective makes it easy to be distracted by thoughts of financing and location. Where do you want the second home to be located? Will you buy the property with a mortgage, or will you attempt to save up enough to purchase it in cash? But it's also essential to consider how you will protect your second home, just like your main residence. This is where second-home insurance comes in.
Below, our expert on property claims in South Florida explains second home insurance and how it works.
Second home insurance is a kind of home insurance for a property you own in addition to a primary residence. Second home insurance is often more expensive than the policy you have on your primary residence. A second home insurance policy may also be more restricted in terms of coverage.
Why? Because you don't reside in the second home full-time. This raises the likelihood that the property might be a target of burglary or vandalism. It also increases the possibility that other problems (such as leaks, structural damages, or infestations) might go unnoticed for a considerable time, worsening the cost of remediation.
In insurance, a second home is any property you own that is not considered your primary or full-time home. This might include:
Notably, investment or rental properties are generally not considered second homes. Therefore, if you own a property to generate income through rent, you will likely need to purchase landlord insurance instead of second home insurance.
Depending on the carrier, this might be achievable. But in most cases, you need to purchase a separate policy for a second home. That said, many carriers make it easy to bundle multiple policies and may provide one or more discounts if you do.
If you buy a second home, it's critical to mention that some parts of your current home insurance policy — like liability coverage — may extend to the second home. Whether or not this is the circumstance for you will depend on the carrier and policy. If you are uncertain about whether or not this is the case with your current policy, your carrier or insurance agent can help you comprehend your coverage.
Unlike car insurance, there is no legal condition that you must have homeowners insurance for a primary residence or second home. But if you finance your second home with a mortgage or other considerable loan, your lender will likely require you to have adequate coverage as a prerequisite for loan approval. Failing to insure your house or allowing coverage to lapse can force your lender to call your loan or demand payment in full ahead of schedule.
These are details on ensuring your second home or vacation home. Contact us today if you need assistance with property claims in South Florida. We are here for you.