Home insurance for vacation homes

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Homeowners insurance policies provide coverage for the physical structure of your home and the personal belongings inside. However, most home insurance policies only cover your primary residence. If you have a vacation home where you spend a few weeks or months out of the year, you will likely need to purchase secondary homeowners insurance.

Defining vacation home insurance

Vacation home insurance is another name for secondary home insurance, a specific type of policy that offers coverage for second homes specifically, like a cabin in the mountains or a beachside bungalow. Vacation home insurance is similar to traditional homeowners insurance, but there are some key differences. Primarily, vacation home insurance is a separate policy from your primary homeowners policy.

What does vacation home insurance cost?

The cost of homeowners insurance, including vacation home insurance, depends on a variety of factors. When you apply for a policy, the insurance company will most likely consider the state where the home is located, the condition of the home, the type of home and your claims history to calculate your premium. In most states, your credit rating and ZIP code will also be used to determine how much you pay, although some states ban the use of these rating factors. Like with regular home insurance, the amount of coverage you select and your deductible will also impact the cost.

Vacation home insurance premiums by state

Seasonal home insurance rates vary significantly by state. The national average annual premium for vacation home insurance is $2,014, but your premium could be higher or lower based on where your home is located and your other rating factors. The table below includes the average annual cost of secondary homeowners insurance in all 50 states:

State Average annual premium for $250,000 dwelling coverage
Alabama $2,524
Alaska $1,825
Arizona $1,735
Arkansas $3,582
California $1,461
Colorado $2,230
Connecticut $1,796
Delaware $1,106
Florida $2,262
Georgia $2,091
Hawaii $697
Idaho $1,271
Illinois $1,858
Indiana $1,578
Iowa $2,006
Kansas $4,281
Kentucky $2,872
Louisiana $3,184
Maine $1,485
Maryland $1,740
Massachusetts $1,865
Michigan $1,605
Minnesota $2,416
Mississippi $3,235
Missouri $2,302
Montana $2,669
Nebraska $4,189
Nevada $1,371
New Hampshire $1,147
New Jersey $1,128
New Mexico $3,275
New York $1,470
North Carolina $1,603
North Dakota $2,694
Ohio $1,895
Oklahoma $5,390
Oregon $1,096
Pennsylvania $1,217
Rhode Island $1,944
South Carolina $1,840
South Dakota $3,038
Tennessee $2,736
Texas $3,143
Utah $975
Vermont $1,020
Virginia $1,557
Washington $1,306
Washington, D.C. $1,620
West Virginia $1,813
Wisconsin $1,368
Wyoming $1,274

What does secondary home insurance cover?

Secondary home insurance and traditional home insurance have some overlap in terms of coverage. But keep in mind that these are two separate policies. When you purchase a vacation property, you will likely need a separate policy to cover that home. Some companies may allow you to add coverage for your vacation home to your primary homeowners policy, but this is not common. Here is a brief overview of what seasonal home insurance covers:

  • Dwelling coverage: Vacation home insurance covers the physical structure of your home from damages. If you have a named perils policy, your home will be covered for the types of damage specifically listed in the policy. Open perils policies cover your vacation property for any peril that isn’t specifically excluded.
  • Other structures coverage: Other structures coverage will reimburse you for repairs if your detached garage, fence, shed or other detached structure gets damaged in a covered event.
  • Personal property coverage: Personal property coverage pays to replace your personal belongings, like clothing, furniture and appliances, if they get damaged or destroyed by a covered peril.
  • Loss of use coverage: Loss of use coverage, also called additional living expenses coverage, pays for hotel bills, parking fees, restaurant meals, laundry and other expenses if your vacation home is damaged in a covered event and you have to temporarily relocate.
  • Personal liability coverage: Personal liability coverage pays if someone gets injured at your home and you are found at fault or if you cause damage to someone else’s property. Liability coverage also covers legal fees if the victim sues you.
  • Medical payments coverage: Medical payments coverage will cover the cost of a guest’s medical bills if they get injured on your property, even if you were not responsible.

Other coverage types to consider

You may think that vacation home insurance will cover any disaster you could possibly face, but in reality, second home insurance does not cover everything. In fact, certain losses, including floods and earthquakes, are explicitly excluded from most secondary home insurance policies. As a result, you might need to consider purchasing additional coverage.

For example, if you own a vacation home near the beach or on a lake, your home may be vulnerable to flood damage. Purchasing a separate flood insurance policy could protect your finances if a flood causes extensive damage to your home or property. If you own a home in an area where earthquakes are common, getting earthquake insurance may be beneficial.

If it is available and your home qualifies, you may also want to ask about replacement cost coverage for your home and personal belongings. With replacement cost, you would receive the full cost to replace your destroyed belongings or home, rather than an amount with depreciation taken out.

Ways to save on vacation home insurance

Seasonal home insurance can be pricey depending on where you live and what type of home you own, among other things. However, there are ways to save money on your policy. Here are some suggestions for getting cheap homeowners insurance:

  • Get multiple quotes: Before choosing an insurance provider, you may want to shop around and get homeowners insurance quotes from several different carriers. That way, you can see which provider will offer the lowest rate for the amount of coverage you need.
  • Pay your premium in full: Many insurance companies will give you a discount if you pay your annual premium upfront in one lump sum rather than in 12 monthly installments. However, if your vacation property insurance is paid from your mortgage escrow account, this discount will likely not apply.
  • Look for discounts: A majority of property insurance companies offer discounts that can help you save money on your policy. As you are shopping around, look for providers that have several discounts you can qualify for, like being claims-free, purchasing a policy online or enrolling in automatic payments.
  • Install a security system: Homes that have a security system installed may be less expensive to insure, especially vacation homes that are often targeted by theft.

Renting out your vacation home

Many people choose to rent out their vacation home to make some extra income while they are staying at their primary residence. However, keep in mind that renting out your home on a platform like Airbnb will likely have additional insurance requirements.

In this situation, the best thing to do is to talk to your insurance company. You may need to purchase a short-term or long-term rental insurance policy, depending on how long the property is rented for. If you rent the home for only a short period of time each year, you might be able to add an endorsement to your policy to cover it as a vacation rental. However, if you rent a location for a longer period of time or year-round, you’ll likely need a standalone rental property insurance policy.

One thing to keep in mind is that, even with a short- or long-term rental insurance policy, the insurance will only cover the physical structure of the home, equipment that is used to operate the home (like a washing machine) and your liabilities as the owner. It will not cover guests’ personal belongings. Renters will need to rely on their own renters or homeowners insurance policy to cover their personal items while they are staying at your vacation home.

Frequently asked questions

What is the best second home insurance provider?

The best second home insurance provider is different for everyone. Factors like where you live, what type of home you own, how much coverage you need and your budget will all impact which carrier is right for you. Getting quotes from several providers could help you decide.

How much home insurance do I need?

Especially if you are a first-time home insurance buyer, you may be wondering how much coverage you need. The amount of home insurance you buy depends on your circumstances, but as a general rule, insurance experts suggest that you buy enough dwelling insurance to cover the cost of rebuilding your home back to its original condition if it were destroyed. You may also want to purchase enough personal property insurance to cover the full value of your and your family’s belongings. Finally, pick your liability coverage limit based on your personal financial assets that could be at stake in the event of a lawsuit.

Does a lake home policy cover my boat?

It might. If you have a lake home, you may have a boat, jet ski, canoes, kayaks or other water toys. You might even have a dock or boat lift on your vacation property. The best course of action is to discuss these features with your insurance agent. You might be able to add coverage for your boats, personal watercraft, dock or boat lift to your policy, or you may need a separate policy for some items.

Methodology

Bankrate utilizes Quadrant Information Services to analyze 2021 rates for all ZIP codes and carriers in all 50 states and Washington, D.C. Quoted rates are based on 40-year-old male and female homeowners with a clean claim history, good credit and the following coverage limits:

  • Coverage A, Dwelling: $250,000
  • Coverage B, Other Structures: $25,000
  • Coverage C, Personal Property: $125,000
  • Coverage D, Loss of Use: $50,000
  • Coverage E, Liability: $300,000
  • Coverage F, Medical Payments: $1,000

The homeowners also have a $1,000 deductible and a separate wind and hail deductible (if required). For vacation homes, rates were calculated based on secondary occupancy.

These are sample rates and should be used for comparative purposes only. Your quotes will differ.

Written by
Elizabeth Rivelli
Insurance Contributor
Elizabeth has two years of experience writing for insurance domains such as Bankrate.com, The Simple Dollar, Coverage.com and NextAdvisor, among others. In addition to auto insurance, Elizabeth regularly writes about home insurance, renters insurance and life insurance. She also covers industry trends and general insurance education.
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