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Vacation Home Insurance: Everything You Need to Know


Owning a vacation home is a dream of many homeowners. It’s important to keep in mind that many have risk factors that will impact insurance rates. 

  • Insurance premiums for vacation homes are higher than a standard homeowners policy. They aren’t primary residences and often have increased flood risks. 
  • If you’re hoping to rent your vacation home when you aren’t using it, property and liability risks increase. Renting will require additional insurance protection. 

Many people dream of owning a vacation home: a getaway where they can escape and relax whenever the mood strikes. Vacation properties can also be great investments, depending on where they are located. If you’re in the market for a vacation home, it’s important to do the research and learn how to insure your vacation home property. Here’s everything you need to know about vacation home insurance.

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What causes higher risks for vacation homes?

Insurers view vacation homes as having higher risk because they’re not the owners’ primary residence. This means they might not be quick to notice a simple maintenance issue. Issues that would be fixed quickly may go unchecked for longer. Since these properties aren’t usually occupied full-time, they can also be at risk for burglaries and vandalism. 

These factors mean that you’ll probably pay higher premiums for your vacation home insurance than you pay to insure your permanent residence. If all factors are relatively equal, you can anticipate your premium on your vacation home to be around 50% higher than your standard homeowners insurance policy

What does a vacation home insurance policy cover?

A vacation home insurance policy covers many of the same things your homeowners insurance policy covers, but the policy will likely be structured differently since you don’t live there full-time. 

For example, it will include protection from covered perils such as storm damage, theft and fires. However, the policy might be built around “named perils only”. Which means the coverage extends only to damage incurred from a peril specifically included in the policy. 

In contrast, most standard homeowners insurance policies cover all perils except for those that are specifically excluded. In other words, a “named peril policy” doesn’t cover as much. 

It’s important to make sure that your vacation home insurance policy includes liability and medical payments coverage, especially if you plan on having friends or family visit. Liability and medical coverage protect you if someone is injured on your vacation home property. 

Some insurance companies might extend liability and medical coverage from your primary homeowners insurance policy to your vacation home. This occurs if both homes are insured by the same insurance company.  

Talk to an insurance agent about how your homeowners and vacation home insurance policies are structured. This will ensure your coverage adequately protects you. 

Does location impact a vacation home insurance policy?

The real-estate adage that says three things matter when choosing a property: location, location, location. This applies to insurance, too. Where your vacation home is situated — think: by the ocean, in the mountains or near a forest — will be a factor during underwriting. 

There are several reasons why location impacts how much it costs to insure your property, including how much it would cost to rebuild or repair if damaged, comparable property values and the types of weather risks in the area. 

What doesn’t vacation home insurance cover?

Your vacation home insurance will not cover damage from flooding, which is almost always excluded from standard property insurance coverage. If your vacation home is near a beach, coastline, lake or river, you will need additional flood insurance coverage. 

Your vacation home might need additional coverage even if it isn’t prone to flooding. Cabins in the forest may be more susceptible to wildfires, and mountain areas can be at risk of avalanches and landslides. 

Recently, drought in the West and hurricanes on the coasts have caused losses for insurers. Many companies are tightening underwriting criteria. In some cases, they aren’t offering policies in disaster-prone areas. 

Does the type of home or amenities matter?

The style, age, and condition of a property can also affect the cost of your vacation home insurance. Amenities or add-ons can also have an impact on cost. A simple cabin in the woods will cost less to insure than a cliffside, beachfront property. A condominium in a popular ski area that was built five years ago will have a different insurance cost than one built 30 years ago in the same town.  

Differences in local laws, fire codes, and building materials can affect your insurance costs.  

Amenities matter, too. Pools and hot tubs are wonderful features to have at your vacation home, but they represent an increased liability risk. That additional risk is factored into your rate. 

How much does it cost to insure a vacation home?

The cost to insure a vacation home depends on your circumstances. In addition to the location and type of structure, the contents of your vacation home can also affect your rate. Contents refers to furniture, TVs and sporting equipment. 

Even if the items in your vacation home are older or brought from your primary residence, they could still be costly to replace. Take the time to accurately assess the value of your belongings in your vacation home. 

It often costs more to insure a vacation home because it isn’t likely that you’ll live there full-time. Think carefully about keeping any valuables there, such as art, antiques or a gun collection. These items require a valuable personal property rider. The risk items being stolen increases when they are kept in a place that is vacant for long periods of time. 

Can I rent out a vacation home?

There are several internet platforms such as Airbnb that make short-term rentals easy. Many property owners try to use these platforms to earn money by renting out their vacation homes. 

As attractive as this idea is, renting a vacation home creates additional risk for the property. It’s important to speak to your insurance agent about the insurance coverage you’ll need to stay protected. 

The platforms that allow short-term rentals have terms of service for both hosts and guests. These terms typically prevent guests from suing the platform if something goes wrong.  

This means that liability will often fall to the host. Some platforms offer special host protection insurance. However, you’ll need to make sure that you read the entire policy and exclusions. That way, you’ll understand what it covers. 

Your insurance agent might recommend additional liability insurance coverage. Umbrella coverage is one option that will protect you beyond your existing vacation home insurance policy. You may also want to look into rental property insurance

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Where can I get a quote for vacation home insurance?

Owning a vacation home can be an ideal retreat for you and your family, but it needs to be protected. Even if you’re looking to earn money by renting your family vacation home, you may need additional coverage. Talk to an insurance agent or connect with an Expert Agent today to find the coverage you need. 


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