Vacation or Seasonal Home Insurance - What You Need to Know

You've saved up your money and you've finally managed to put a down payment on your dream: A seasonal or vacation home. You can't wait to spend a week or two in your new abode, but first you need to make sure you're insured. How does vacation or seasonal home insurance work?

Age of the Home

One of the primary ways to determine the cost of vacation or seasonal home insurance is to consider the age of the building. Older homes were not subject to the strict building guidelines that exist today, according to the New York Times, so if you've purchased an older vacation home you will probably pay more. Newer seasonal homes have better security and structural integrity, and are therefore less expensive to insure.

Location of the Home

Insurance rates for seasonal or vacation homes vary depending on where the house is located. Rates are typically higher in urban areas, which means that remote vacation homes are going to be cheaper to insure. Consider whether the home is in a gated community-security means less chance for theft.

It is also important to consider what natural disasters might impact a seasonal home. For insurance purposes, homeowners should purchase riders or addenda to policies for flooding, hurricane damage, forest fire damage, or any other act of nature that might cause damage.

Rentals

According to SmartMoney, you'll pay more for vacation or seasonal home insurance if you rent it out when you aren't using it-around 20 percent more, in fact. This is because landlords take on more risk by inviting strangers into their homes, and statistically these properties incur more damage.

Sticking with the Same Insurance Agent

Smart Money also suggests purchasing seasonal or vacation home insurance from the same agent who sold your current home policy. Combining those policies under the same company can yield attractive discounts because you are offering more of your business. This also increases your chances of getting accepted, since many insurance companies are wary of providing coverage for second homes.

Research First

In the wake of Hurricane Katrina, many vacation and seasonal home owners are having difficulty finding anyone to insure them at all. This is particularly true in areas near the coastline because there is a much higher probability of damage due to natural disasters.

Before buying a second home, find out which insurance companies in your area are willing to insure seasonal properties. This might influence your buying decision or even help you narrow down a good idea to start looking in.

Increase Security

It isn't always physically or financially feasible to buy a vacation home in a gated community with 24-hour security. You can, however, implement other safety measures to increase security in the eyes of the insurance company.

A high-quality alarm system, for example, will deter thieves and help keep your vacation home safe. Put a fence around the pool, install a fire-resistant roof, maintain all appliances, and consider storm doors and windows. All of these preventative measures may help decrease insurance costs for seasonal or vacation homes.