Do I Need a Separate Policy for a Vacation Home?

A vacation home is an increasingly common way for individuals to enjoy spending time away from their normal settings while still maintaining a comfortable setting. However, many homeowners are under the misconception that they only need to get home coverage quotes for their primary residences since they only visit their vacation dwellings on a part time basis. The fact is that you need to maintain separate house insurance policies for each place in order for both of your homes to be covered in the event of disasters and accidents. Purchasing vacation home coverage requires that you consider a few points before getting started.

Basic Coverage

Just like your primary residence, it is imperative that your vacation home is covered up to a total loss. This amount can vary significantly from the current value of the dwelling, as well as the initial amount you paid for it. Your vacation home's value can depreciate overtime, so you do not want to rely on this statistic when it comes to insuring the property. Instead, you should obtain an estimate of what it would cost to build the house from scratch.

Before you seek out coverage on your vacation home, you should first gather some estimates as to how much it costs to build it. It is important that you obtain estimates from at least two to three contractors so that you can average out the numbers. These contractors will take inflation into consideration, and try to give you as accurate an amount as possible. You will need this information when it comes to figuring out how much coverage you should get for the property.

In some cases, vacation homeowners still owe mortgages on the properties. If this situation applies to you, then you will need to talk to your lender before obtaining a house insurance policy. Banks can have certain stipulations when it comes to coverage, such as obtaining a minimum amount of insurance. Also, you might need to add additional coverage, such as earthquake or flood insurance.

Not having any coverage on your vacation home can be just as detrimental as it is to not have any insurance for your primary residence. If a disaster occurs, then it is up to you to pay for the rebuilding costs out of your own pocket. This is impossible for most people, and the situation can be even worse if you still owe a mortgage on the vacation property--you would still have to make your monthly payments, yet still figure out how to rebuild the home.

Vacation home insurance is also valuable if you need to make minor repairs to the structure. Although an accident might not make the property a total loss, there can still be enough damage so that it would be impossible for you to pay for the expenses on your own. Your homeowners on your vacation property can help cover the costs of repairs that occur from disasters or accidents.

Special Circumstances

Aside from natural disasters and accidents, there are certain other features that you should consider adding to your house insurance for your vacation home. Flood and earthquake coverage is not automatic with a basic homeowners insurance policy, and you should strongly consider adding one or both of these features. Floods can occur anywhere, and your lender might even require it. Your risk of an earthquake can vary, so it might make more sense to add this kind of rider if you live in an earthquake-prone area. The insurance company can also make recommendations based on the location of your vacation home.

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