Second home insurance: How to insure a vacation home

Homeowners insurance for a vacation home is typically similar to that of a primary residence, meaning it’s financial protection for your home, belongings, and assets. The main difference is that home insurance rates are generally higher for second homes due to the increased risk of claims. 

Since secondary homes are more likely to be unoccupied in spurts throughout the year — and therefore are more susceptible to burglary and sustained damage from a leak or fire — insurance companies usually charge more for second or vacation home insurance policies. However, there are plenty of ways to keep your second home insurance rates down. 

What is vacation or second home insurance?

Vacation or secondary home insurance is financial protection in the event your vacation home or property gets damaged by a covered peril, like a fire or windstorm. Secondary home insurance contains the same six basic protections as primary home insurance. 

The main difference between primary and vacation home insurance is that insurance for secondary homes typically costs more. That’s because vacation homes are empty throughout much of the year and face a higher risk of insurance claims than primary homes.

That being said, if you have a clean claims history, decent credit, and your home isn’t a literal shack on the beach, you should be able to find an insurance company to insure your property at a rate that works for you.

Do I need to buy homeowners insurance for my second home?

If you have a mortgage on your second home, your lender will likely require you to have home insurance on the residence, at least until your loan is paid off. Even if you paid off your mortgage or you don’t have one, you should still get vacation home insurance — forgoing home insurance would mean you’re totally on the hook to pay to rebuild your home or replace your belongings in the event of a burglary, fire, windstorm, or other type of disaster.

You’d also be going without personal liability coverage — meaning if a guest gets hurt and sues you, you risk losing your savings, investments, and other financial assets  in court. 

Can you cover two homes under a single homeowners policy?

No, you generally cannot insure two homes under a single home insurance policy since every home is different and has its own unique coverage requirements. 

However, several insurers give policyholders the option to take out two home insurance policies as part of a policy bundle, with one bill and other policy perks. Bundling policies with a single company can also lower your insurance premiums.

What does a second home insurance policy cover?

If you plan on simply using your second  home as a vacation retreat or somewhere you live part time, it’ll likely just require a regular home insurance policy with the six standard coverages outlined below. Just remember that you’ll need to inform your insurer that the property is a secondary residence, not primary. Failing to do so could negate your coverage in the event of a claim. 

Here’s a breakdown of the types of coverages included in a second home insurance policy:

• Dwelling coverage: Covers the structure of your secondary residence against perils like fire, weather-related damage, and theft.

• Other structures coverage: Covers additional structures on your property, including gardening sheds, detached garages, poolhouses, and boat docks.

• Personal property coverage: Covers personal belongings in your second home, such as furniture, clothing, kitchenware, and more.

• Loss of use coverage: Covers additional living expenses in the event your second home becomes uninhabitable due to a covered loss and you need to live somewhere else temporarily.

• Personal liability coverage: Covers legal and medical expenses if you’re held legally responsible for someone else’s injury or property damage.

• Medical payments coverage: Covers guests’ medical expenses if they sustain a minor injury on your property — regardless of who’s at fault

How much does vacation home insurance cost?

Standard homeowners insurance for a full-time residence costs an average of $1,899 per year, but you can expect to pay more than that for a second home insurance policy. 

Keep in mind that different insurers will also charge different rates for your vacation home. American Family, for example, estimates that vacation home policies can are typically two to three times more expensive than home insurance for full-time residences. 

The agents at Policygenius can help you compare quotes from multiple insurers who cater to seasonal homes to make sure you’re getting the best rate and coverage available.

Why is second home insurance more expensive?

Second home insurance is typically more expensive because insurers believe you're more likely to file a claim due to your home being unoccupied for some of the year or being close to high-risk flooding or wildfire areas. This puts your rates for your second home up there with the high rates for other high-risk properties.

3 factors that affect secondary home insurance rates

How often you use your vacation home, where it is, and features of your home all affect how much you pay in premiums each year.

1. How often the home is occupied

Most second homes are used as vacation homes, and since life isn’t simply a year-round vacation, it’s going to have a lot of alone time. For insurance companies, the home’s vacancy is a risk, and they’ll charge you higher rates based on that factor alone. 

There’s a few reasons for this:

• Vacant homes are more likely to be burglarized

• They’re more likely to have hazards (like leaks, fires, or infestations) go undetected

• They’re more likely to be vandalized

Liability risk is also considered when rating vacation homes. For example, if your next-door neighbor’s kid sneaks onto your property, uses your pool, and gets injured or drowns, you could be saddled with liability for legal expenses for not securing your property well enough. 

Conversely, if your home has a groundskeeper, or is in a gated community or HOA with security cameras, that could potentially lower rates on your vacation home.

2. Location

You may be wondering why your modest-sized oceanside retreat in Naples costs a couple thousand more a year to insure than your 5,000-square-foot split-level in Duluth. The answer is that with home insurance, like a lot of other things, location is everything. 

Waterfront homes are deemed risky by insurers because of the heightened threat of windstorm or hurricane damage, and that means, at least in the case of the above example, that your premiums could be significantly higher. 

3. Vacation home features

Whether your vacation home is a mobile or manufactured home, tiny house, historic home, or log cabin will all affect rates. Certain amenities that you have for your vacation home, like a hot tub, trampoline, sauna, or pool can also cause your insurance rates to go up since they can increase your liability risk.

How to insure your vacation home

Shopping for vacation home insurance isn’t much different than shopping for home insurance for your full-time residence. Here are six steps to take when shopping for secondary home insurance. 

1. Learn about how much coverage you need. How much home insurance you need will depend on the replacement cost of your vacation home, meaning the amount it would cost to rebuild your home from the ground up. You should also consider how much personal property and liability coverage you need.

2. Ask about additional coverage that you may need. Is your secondary home located in a coastal beach town? You may need coastal home insurance and flood insurance. Do you rent out your second home? You may need landlord insurance or short-term rental coverage. You may also want to consider earthquake coverage if you live near fault zones. Insurers also offer endorsements for hazards not covered by standard insurance, like water backup coverage for drain or sewage backups. 

3. Gather information about your vacation home. You’ll want to provide your insurer with as much information about your home as possible so that you get an accurate quote. Knowing an estimate of your home’s replacement cost and the full value of your personal belongings is a good start. Also knowing your home’s age, square footage, age of its roof, renovation history, and proximity to a fire department can all be helpful. 

4. Compare vacation home insurance quotes. Experts recommend that you compare quotes from at least three different insurance companies before choosing a policy to make sure you’re not missing out on a better deal elsewhere. The agents at Policygenius can help you compare multiple different insurers and coverage options all at once to find you the best coverage at the most affordable price. 

5. Finalize your policy details. Once you’ve made a decision on which policy you want to go with, you’ll need to finalize your coverage amounts, add-ons, deductibles, discounts you qualify for, and more. 

6. Pay your premium. Once everything is confirmed and you signed the dotted line, you’ll need to pay your policy premiums. Some insurers may offer you a discount if you pay your premiums up front and in full for the year. Otherwise, you might be able to pay them monthly or twice a year. 

Insurance companies that offer second home insurance

Many large insurance companies offer coverage for vacation homes. Farmers Insurance, for example, sells homeowners insurance policies geared specifically for seasonal and vacation homes, and just about every other major carrier has similar offerings. An agent at Policygenius can help you compare multiple second home insurers at once to make sure that you’re getting the best deal.

Below are some companies that offer seasonal, vacation, or second home insurance.

Homeowners insurance if your rent out your second home

If you plan to rent out your secondary home when you’re not there, your insurer will likely increase your rates or require you to add short-term rental coverage to your homeowners policy. Certain rental services like Airbnb offer their own insurance, but it’s not sufficient on its own.

If you plan to rent out your vacation home for long periods of time, you’ll need to get a landlord insurance policy, which is standard for any rental property. 

How to save on second home insurance

There are a number of ways you can make your second home insurance costs more affordable. Insurance companies offer many of the same discounts for second homes as they do for primary residences, including discounts if you:

• Install security cameras and fortify your property

• Install risk-prevention systems, like water leak sensors

• Equip your home with a central burglar alarm or smoke detector

• Bundle your primary residence insurance and secondary home insurance under one policy package

• Buy a vacation home that’s part of an HOA community

• Re-shop your homeowners insurance policy on an annual basis — our Policygenius agents can help you re-shop your home insurance to make sure you're getting the best deal possible