Why Do Vacation Homes Often Cost More to Insure?

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Why Do Vacation Homes Often Cost More to Insure?

Why Do Vacation Homes Often Cost More to Insure?

For many people purchasing a vacation home is a dream come true. While it’s great to be able to have a place you can always go to get away from everyday life, there are certain expenses you may not have anticipated. Depending on where your second home is, the cost of your insurance could be one of those areas of increased costs.

Why is the Coverage More Expensive?

There are a number of factors that can impact the cost of insurance for your vacation home. Vacation homes are usually located in special areas – near a beach or lake or in the mountains – not in your regular city or suburb. This usually gives insurance companies cause for concern because access to emergency services may be limited or the chances of weather damage may be higher. A few examples include:

  • Homes in the mountains may be exposed to severe winter weather, creating a need for special winterization to avoid broken pipes or roof damage.
  • Homes in the woods or secluded areas are nowhere near fire hydrants or water sources. This means the risk of a loss is higher if there is a fire.
  • Homes near lakes or oceans run a higher flood risk. This means you’ll have to purchase a separate flood insurance policy to protect against water damage.

Your vacation home may also be vacant a lot of the year unless you rent it out. A home that is vacant runs a much higher risk of becoming a target for burglars and vandals. Even if your vacant home was only damaged by bad weather, the damage might not be noticed for an extended period of time, allowing it to become worse than damage that is noticed and dealt with right away.

How to Keep Your Costs Down

The good news is that there are things you can do to minimize the cost of your vacation home’s insurance policy.

  • Start by asking your primary homeowners insurance company if they offer multi-policy discounts. In fact, many companies won’t insure your vacation home unless they also insure your primary residence. Keep this in mind and shop both policies around if necessary.
  • Make sure your vacation home has a fire and alarm system. Both will better secure your property, deter burglars, and minimize damages.
  • If your home is in a secluded area, keep the area around the house free of debris.
  • Try to avoid a vacation home with a pool. The pool will be largely unattended and will become a huge liability – a much bigger problem than the pool at your primary residence (which your insurance company likely charges you more for already). If you do have a pool, consider higher privacy fences and secure, locked gates.
  • Consider partnering with a real estate agent to offer your home as a vacation rental throughout the year. You can block the weeks you want the home available for your own use and you will have people in the house and checking on the house more often.

Don’t let the cost of insurance scare you away from buying the vacation home of your dreams. Use caution when making your choice and talk to your insurance professional before you buy and sign on the dotted line. Their knowledge and experience can help guide you in your purchase. You may end up paying a bit more, but the added cost will be worth the investment.

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