Homeowners Insurance for a Second Home
The type of second home insurance you need will depend on how it will be used while you're living in your primary residence. Seasonal or vacant home insurance is available if your second home will be unoccupied when you're not there. Otherwise, you may need to buy commercial property insurance or a landlord policy if you will be using your second home for short-term or long-term rentals.
Second home insurance tends to be more expensive than your primary homeowners policy. Keep reading to learn how second home insurance works and what it will cost you.
What Is Second Home Insurance?
Second home insurance insures your second home's structure and personal belongings in the event of a covered peril, like fire, windstorms and theft. You also receive personal liability protection which will cover you when you can be held liable for other people's property damages or injuries that occurred inside your second home.
Vacant home insurance is a common form of second home insurance if it will be unoccupied most of the year. However, this type of coverage generally operates on a named peril basis. The property will only be covered for perils specifically listed in your policy, which typically include fire, windstorms and theft. You're covered for a lot but the coverage scope is still more limited than standard homeowners insurance coverage.
What type of insurance do I need if I rent out my second home?
If you plan to rent out your second home, you will likely need a commercial or landlord policy.
Commercial policy or short-term rental coverage: Using your second home for short-term rentals multiple times in a year (e.g., running an Airbnb) would be considered a business and you will likely need a business policy or short-term rental coverage.
Landlord policy: If you're renting out your second home long-term to tenants, then you may want to consider landlord insurance.
What Should a Second Home Insurance Policy Cover?
Depending on your policy, your second home may have the following coverages:
Dwelling and additional structures: Pays for the cost to rebuild or repair the dwelling structure and other permanent structures (e.g., fences, detached garages) if damaged from a covered peril, like fire, windstorm or theft.
Personal property: Reimburses you if your personal belongings are damaged or lost from a covered peril.
Personal liability: Pays for claims related to bodily injuries or property damages of other people when you can be held liable.
Medical payments: Pays for minor injuries that guests suffer while inside your second home.
Additional living expenses: Pays for living expenses if your second home is temporarily uninhabitable after a covered peril (e.g., structure being rebuilt after a fire).
Commercial policies may include additional coverage, like rental income protection in a landlord policy. This coverage will replace rent checks if your tenant is unable to live in your second home because it was damaged by a fire or some other covered peril. Describe how your second home will be used with your home insurance company to see which policies and coverages best suit your needs.
What Does a Second Home Insurance Policy Not Cover?
Generally, all insurance policies will not have coverage for the following perils:
Landslides and mudflows
Perils not named in your policy (if you have a named peril policy)
How Much Does Second Home Insurance Cost?
You can expect to pay anywhere from 1.5 to three times more than what you're currently paying for homeowners insurance on your primary residence. Higher premiums are typically attributed to the increased risks that second homes pose, such as:
Leaks, fires, theft and other dangers may go unreported if the house is empty for an extended period.
Hosting guests in your second home may increase the likelihood of liability claims being filed.
Second homes may be located in high-risk areas (e.g., a beach house is more vulnerable to floods and windstorms).
Factors That Impact Secondary Home Insurance Rates
Home insurance companies will consider several factors when calculating your premiums, including:
Location: Properties in higher-risk areas, like along the beach or in an isolated mountain region, may experience higher home insurance premiums.
Structure replacement cost: The cost to rebuild your home after an incident will affect how much insurance you will need to purchase.
Type of property: Insurance costs can vary based on if the home is a standalone structure or a condo unit. Condo units, for example, may have lower premiums if they are within a gated community and the HOA has installed a security system.
Vacancy: Insurers may charge higher premiums if your home is unoccupied for extended periods since there is a higher chance of dangers (e.g., burglaries, fires, broken pipes) going unreported.
Amenities: Hot tubs, pools and other amenities can increase the cost of second home insurance.
Can You Insure Two Homes Under the Same Policy?
You generally will not be able to have two properties under the same homeowners insurance policy. You will likely need to purchase a separate policy for the second home. One possible exception is the liability portion in your main homeowners policy, which may extend to your second home depending on your insurer.
SAVINGS TIP: Ask about bundling discounts if you use the same insurer to cover your primary residence and second home.
How To Boost Your Vacation or Second Home's Protection
You may be able to lower your insurance premium if you install safety and security features inside and outside of your second home. Consider the following tips:
Install a smart door lock that allows you to lock and unlock the door remotely.
Install a doorbell camera so you can see people approaching your doorstep.
Set up a burglar alarm system and cameras to deter criminal activity.
Avoid leaving valuables in your second home while it is unoccupied or keep them locked in a safe.
Add motion-sensor outdoor lighting around your home.
Find Cheaper Rates for Your First and Second Home
Second homes can be a relaxing retreat if you use it as a seasonal getaway but can often come with higher insurance premiums. Avoid paying more than you have to by using SmartFinancial to shop around for the lowest rates for both your first home and vacation property getaway. Just enter your zip code below or call 855.214.2291 to receive your free homeowners insurance quotes.
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