Seasonal homes, sometimes called second homes, are an investment for homeowners who are looking for a peaceful place for some respite from daily life. Many seasonal homes are in prime vacation locations such as near a body of water or in a mountain area. These vacation homes offer a range of benefits to their owners, but also come with a number of risks, some similar and some different from the risks of the primary home. Below are some things insurance agents need to know about insuring seasonal homes.
Certain Factors Impact Seasonal Home Insurance Costs
The homeowners policy for a seasonal home provides the same types of coverage as the homeowners policy for a primary home, but there are certain factors that can have an effect on season home insurance costs.
- Location. Location is a factor in any type of insurance coverage, and it can add to the cost of insurance for a seasonal home; especially if that home is in an area that is exposed to more risks than the primary home. As these are typically vacation homes, they are often in locations that, while very desirable to travel to, may be more expensive to insure. For example, a seasonal home near the Atlantic Ocean can be more at risk of damage from a storm surge or excessive winds and may require additional flood or hurricane coverage, while a cabin in the mountains would be more susceptible to damage from wildfire and may require additional coverage or higher policy limits.
- Property Type. Another factor that can affect the cost of insurance is the type of property being insured. Details like the age of the building and type of materials used have to be taken into consideration when determining cost. Another important factor is whether the seasonal home is a stand-alone building, a townhouse or part of a condominium complex. This matters because a condominium unit or a townhouse is more likely to be part of a homeowners association, so some of the risk and maintenance will be absorbed by the association. A stand-alone structure may not have the added security offered by an association, so the homeowner will have to assume all of the risk.
- Property Use. A seasonal home that is being used solely by the homeowner and their family has different exposures than one that is being rented out to others when the owner is not using it. This type of property use is not covered under a standard homeowners policy and may require an endorsement or an additional insurance policy to cover renters.
- Amenities. Since seasonal homes are used primarily for vacation, they often have added amenities like pools and hot tubs to make staying there more enjoyable. Seasonal homes that are on the water may also have a boat or other water sports equipment as well. These types of amenities add increased risks for the homeowners and often require a higher insurance premium. In addition, the homeowner may also need to add additional liability protection to protect their assets in the event a guest at their seasonal home becomes injured or killed while using the amenities.
- Vacancy. A home that is left vacant and unattended for weeks or months over the course of a year comes with added liabilities. While all homes run the risk of being burglarized, seasonal homes have a greater risk of being targeted. Additionally, trespassers on a seasonal property can sue the property owner if they were injured on the property, even though they were breaking the law. These added liabilities can be mitigated through extra liability coverage, which of course increases the cost of insurance for the homeowner.
Seasonal homes are purchased with the intention of enjoying them for many years. Without proper insurance coverage, a vacation home can become more burden than blessing. Insurance agents should make sure they get as many details from their seasonal home clients to ensure they have the best coverage to meet their needs and keep their vacation homes safe and enjoyable for years to come.
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