Are you considering buying a vacation home … a nice place by a lake or up in the mountains where you can go to get away from it all?
Just as when you bought your primary home, you’ll need insurance that is specific to a vacation property — a place at which you won’t be living permanently. So for that reason, you’ll need a policy that is slightly different from a typical homeowner’s policy.
What you need is seasonal and vacation property insurance, which provides coverage for accidental damage, liability and loss. Insurers normally have a standard policy, but they will often allow you to customize the policy to meet your specific needs and situation.
One of the things you need to consider before securing insurance is whether you plan to rent the property out in addition to staying there yourself on occasion.
Some insurers will let you add an endorsement to your primary home’s policy that covers your vacation home, and it’s often the most cost effective way to insure your property.
One issue though with these endorsements is that the coverage level might not be as extensive as with a separate insurance policy. That is particularly true if the home is at greater risk of being damaged by natural disasters like hurricanes, brush or forest fires, or flooding.
Renting it out?
Vacation rentals can be monthly, weekly or even nightly, so they are often considered a different type of activity than is covered under a homeowner’s policy.
A homeowner’s policy typically does not cover vacation rental activities, nor does personal liability coverage.
Vacation rental insurance will cover many of the same things your homeowner’s insurance does, but it offers some additional protection.
Here we’ll outline the three steps to insuring your vacation rental property in order to better preserve the long-term future of your investment:
Liability: Liability insurance protects you against lawsuits brought against you by your guests. The risks of liabilities imposed by lawsuits and similar claims, as well as property damages, will be covered depending on your insurance policy. In most cases, liability insurance will cover you even if you’re found legally responsible for an accident that causes injury or damage to another property.
Building and contents: The next biggest risk you have is the actual property itself. If your renters happen to start a fire or burn your property down, this aspect of your insurance policy will ensure your home and contents are replaced at no cost to you.
Building income: The third exposure you have as a vacation rental owner is business income. After all, your rental property is a business which generates income, therefore you’ll need to protect the income your business makes.
Factors that can affect insurance
Location – Rental properties in at-risk areas – like for the aforementioned natural disasters – may see higher rates. Unfortunately, the attributes that make a vacation property appealing will often result in higher insurance costs.
The beach, for instance, will be at risk for wind and storm damage as well as flooding, while a cabin in the forest can burn down during a forest fire.
You need to consider the price of insurance and the possibility of higher deductibles for homes in these areas.
Property type – Is your vacation property a single-family home, condo or townhome? Condominiums and townhouses usually have lower insurance premiums. If general upkeep for the exterior and some interiors is covered by fees, insurance companies may factor that in while writing a policy.
Facilities and amenities – Insurance companies take into account the extra features of a property that may expose you to more liability, such as pools and hot tubs. You can also purchase extra liability coverage for these items.
BGES Group’s office, located in Larchmont, NY is a full service insurance agency offering, Property, Liability, Umbrella Liability, Business Auto, Bid & Performance Bonds, Inland Marine, Worker’s Compensation, New York State Disability, Group Health, Life insurance, Personal lines and Identity Theft.
Special Contractor Insurance Programs (NY, NJ, CT) – We we have 60+ insurance companies to market your general liability, umbrella liability, business auto, workers compensation, bid & performance bonds and group health coverages. We help contractors set up proper risk transfer. If you’re a contractor we offer extensive information about insurance markets, coverages, risk transfer, subcontractor screening, ways to lower your insurance costs.
BGES Group are Worker’s Compensation Specialists for the States of New York, New Jersey and Connecticut – Issues we address: 1) Lowering pricing – we have specialty programs that can save you up to 40%; 2) Finding a new company; 3) Replacing policies that are being cancelled or non renewed; 4) Audit disputes; 5) Company creating fictitious payroll at audit time; 6) Lowering high experience modifications factors; 7) Misclassification of payrolls; 8) Lowering or eliminating renewal deposits; 9) Getting coverage when you’ve been without for a few months; 10) Covering multiple states under one policy; 11) Eliminating 10% service or policy fees; 12) Timely issuance of certificates; 13) Always being able to get someone on the phone or by email when you need to.
Company: BGES Group, 216A Larchmont Acres West, Larchmont, NY 10538
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