Insuring Your Second Home or Vacation Home

Reading time • 10 minutes

By Matic

Family Using Laptop While Packed Suitcase And Bags On Floor in Second Home

Many individuals and families aspire to one day own a second home in addition to their primary residence — whether a seasonal home they split their time between or a vacation home that they visit a few times a year.

In planning for that goal, it’s easy to be consumed by thoughts of financing and location. Where do you want your second home to be located? Will you purchase the property using a mortgage, or will you try to save up enough to buy it in cash? But it’s also important to think about how you will protect your second home just like you would your primary residence. This is where second home insurance comes into play.

Below, we explain what second home insurance is, how it works, and answer questions that are commonly asked by people looking to purchase a second home.

What is second home insurance?

In essence, second home insurance is simply a type of homeowners insurance policy for any property that you own in addition to your primary residence.

Often, second home insurance will be more expensive than the policy you carry on your primary residence. Likewise, a second home insurance policy may also be more limited in terms of coverage.

Why? Because you don’t live in your second home on a full-time basis. This increases the likelihood that the property may be the target of burglary or vandalism. It also increases the likelihood that other issues (such as a leak, structural damage, or infestation) may go unnoticed for a significant period of time, exacerbating the cost of remediation.

What counts as a second home?

In the world of insurance, a second home is any house or property that you own that is not considered to be your primary or full-time residence. This can include:

A vacation home
A family cabin
A seasonal home
An inherited family home

Importantly, investment or rental properties are typically not considered to be second homes. If you own a property with the intention of generating income through rent, you will most likely need to purchase landlord insurance instead of second home insurance.

Can you add a second home to your primary homeowners insurance policy?

Depending on the insurance carrier, this might be possible. But in most cases you will need to purchase a separate insurance policy for your second home. That being said, many carriers will make it easy for you to bundle multiple policies, and may offer one or multiple discounts if you choose to do so.

If you purchase a second home, it’s important to note that some portions of your current homeowners insurance policy — like liability coverage — may extend over to the second home. Whether or not this is the case for you will depend on your carrier and policy. If you are unsure about whether or not this is the case with your existing policy, your carrier or insurance agent can help you understand your coverage.

Do you need to insure your second home?

Unlike auto insurance, there is no legal requirement that you must carry homeowners insurance — for your primary residence or second home.

But if you are financing your second home with a mortgage or other large loan, then your lender will almost certainly require you to carry adequate coverage as a condition of loan approval. Failing to insure your home or allowing coverage to lapse can cause your lender to call your loan, or demand payment in full ahead of schedule.

Even if you purchase the second home with cash, inherit it, or otherwise own it outright, insuring it will always be one of the easiest steps that you can take to protect you and your family from a worst case scenario. Knowing that you are covered in the event that your second home is damaged or destroyed by a covered event won’t just offer you financial protection, but also significant peace of mind.

What does second home insurance cover?

Second home insurance coverage

At a minimum, your second home insurance policy will include dwelling coverage (also sometimes called structural coverage). Dwelling coverage offers protection in the event that the physical structure of your home is damaged or destroyed during a covered event.

In addition to dwelling coverage, many second home insurance policies will include personal property coverage, designed to help you repair or replace items in your home that are damaged or destroyed during a covered event. Because this is your second home, and not your primary residence, you will often find that the personal property coverage is lower than you might prefer. If this is the case, you can often increase the amount of coverage to meet your needs.

Other coverages that may or may not automatically be included in your policy include other structures coverage, loss of use coverage, personal liability coverage, and medical payments coverage. If any of these coverages are not included in your policy automatically, you will often be given the opportunity to add them if you wish to do so.

As mentioned above, the personal liability coverage offered by the existing homeowners insurance policy you carry on your primary residence may carry over to your second home automatically. If you are unsure whether or not this is the case, check with your insurance carrier.

Second home insurance and perils

Most homeowners insurance policies are what is known as HO-3 (special form) coverage. These policies provide coverage against a broad number of perils. The only perils that these policies do not provide coverage against are those specifically listed as exclusions in the policy.

Second home insurance policies can be written so that they only provide coverage against certain named perils: Perils specifically outlined in your policy. This means that if your second home is damaged or destroyed by an event not listed in your policy, you will not be covered for it.

Common named perils included in named peril insurance policies include damage caused by:

Fire and smoke
Lightning
Explosions
Windstorms
Hail
Theft
Vandalism
and more

Second home insurance riders & additional coverage

In some cases, you may decide that a standard policy does not provide all of the coverage that you need for your second home. In these cases, you can likely purchase additional coverage by either adding a rider to your homeowners insurance policy or by purchasing a standalone policy. This may include:

Important considerations when insuring your second home or vacation home

Before you purchase an insurance policy for your second home, it’s important to consider the following factors which may impact not only the cost of your coverage, but also the types of coverage that you need to thoroughly protect your home.

Where is your second home located?

Different parts of the country are prone to very different weather patterns and threats. It’s crucial that you understand what threats exist where your second home will be located so that you can ensure your policy includes those perils and adequate coverage.

For example, if your primary residence is located in the Northeast, you may not have to worry too much about the threat posed by hurricanes. But if you own a vacation home in a Southern state that experiences intense hurricanes, it is a larger concern.

Similarly, if your primary residence is located in the South where winters are mild and snow is rare, you might not worry about structural damage that might result from snow and ice buildup on a roof. But if your second home is located in a part of the country that experiences harsh winters and significant snow and ice, you need to consider that possibility.

Wherever you plan to purchase a second home or vacation home, you need to determine what unique risk factors exist in that location. Wildfires, earthquakes, flooding, and more can all cause significant damage, and proper coverage is essential to protecting yourself.

What amenities does your second home have?

Second homes — vacation homes in particular — will often include amenities that you may or may not have at your primary residence. Some examples include swimming pools, hot tubs, firepits, proximity to waterfront property (such as a lake), etc.

These amenities can be fun to use, especially when you’re on vacation and looking to destress. But your insurance carrier may consider them to be a hazard, which is anything that either directly leads to a loss or anything that increases the likelihood of a loss. The presence of a hazard may impact the cost of your policy, so it’s important to bear this in mind while shopping for coverage.

What items will you keep at your second home?

Because you don’t live in a second home or vacation home on a full-time basis, most homeowners insurance policies for second homes include limited coverage for personal property. That’s due to the fact that most people will not tend to keep valuable items in the home when they are not actively using it.

Unfortunately, if you do decide to keep valuable items in your vacation home when you are not using it, you may find that you do not have adequate coverage for those belongings. With this in mind, when you are shopping around for policies you will want to think carefully about how much coverage is right for you. You may decide that adding additional personal belongings coverage makes sense for your situation.

Do you intend to rent out your second home when you are not using it?

Do you aspire to rent out your second home or vacation home when you are not using it yourself? While this can be a great way of bringing in some extra cash, it also brings with it its own insurance requirements. Depending on the frequency of rentals, you may need to purchase landlord insurance, which is specifically designed to offer protection against damages that your tenant may cause while renting your property.

Some rental services, like Airbnb, may offer insurance for hosts who decide to rent out their properties. That being said, these policies may or may not offer enough coverage for your needs, so it’s important to understand exactly what is included.