3 THINGS YOU NEED TO KNOW ABOUT INSURING YOUR VACATION HOME
Ready to purchase a summer home along the coast or a winter home in the mountains? Although it may seem like a can't-miss investment, a vacation home could prove to be more expensive than you think, especially when you consider what it takes to insure this residence.
Believe it or not, vacation home and homeowners insurance are not interchangeable. Even though vacation home insurance may offer some of the same coverage as a typical homeowners' policy, certain exceptions could apply.
What differentiates vacation home insurance from a homeowners' policy? Here are three things you need to know about insuring your vacation home, and why you may need to add vacation home coverage to guarantee you're fully protected.
1. Consider that your vacation home may serve as a temporary residence.
The U.S. Bureau of Labor Statistics (BLS) reports the average consumer spent $258.59 annually on vacation costs (food, housing and other living expenses) in 2014. But as a vacation homeowner, you'll likely need to account for these costs and many others.
For instance, if you spend only a few weeks each year at a summer home on the beach, you'll still need to ensure this residence is protected against hurricanes and other inclement weather year-round. You'll also need to insure your summer home based on the fact that this residence may provide only temporary housing, which means you're not present to maintain this residence in the same way an "average" homeowner would take care of his or her house regularly.
Homeowners insurance covers the "average" homeowner, i.e. someone who spends the majority of his or her time at a residence. Since your vacation home serves as a temporary residence, however, you'll need an insurance policy that accounts for the fact that you may spend only a portion of the year at this house.
2. If you rent your vacation home, you may need additional coverage.
Vacation homes may provide supplemental income because they enable you to rent your residence to guests at various times throughout the year.
In fact, market research firm Statista reported U.S. vacation home rentals topped $22 million annually last year, and this total may surpass $37 million by 2020.
But consider this: Would an average homeowner rent his or her house to visitors? Of course not! As such, you'll need insurance that accounts for guests who stay at your vacation residence temporarily.
Your homeowners' coverage will likely not apply to vacation home damage caused by a renter, so you may want to add extra coverage against damage to your vacation house. You also might consider additional liability, bodily injury and medical payment insurance to minimize your risk when visitors stay at your vacation home.
3. You'll want to account for insurance costs before you purchase a vacation home or rent your vacation home to guests.
Before you dot the i's and cross the t's on your vacation home purchase agreement, consider your insurance costs. By doing so, you'll know exactly what it will cost to guarantee you're protected against a wide range of dangers that otherwise could damage your vacation home and its long-term value.
Purchasing a vacation home represents a major investment, one that should not be taken lightly. If you understand your vacation home insurance options, you should have no trouble optimizing the return on your investment.
Vacation home insurance costs may vary based on risk factors such as the location of your residence, the age of your home and its amenities—all factors that could impact the cost of your homeowners' policy, too.
Comparatively, with your vacation home insurance, you'll need to account for problems that could arise when your home is unoccupied, including theft, vandalism or undetected damage like when a water pipe bursts.
Keep in mind that these issues may occur in an average home as well. On the other hand, an average homeowner is more likely to detect and address such problems immediately as opposed to a vacation homeowner who spends only a few weeks a year at a particular residence.
Like any residence, your vacation home represents both an opportunity and a risk. If you devote the time and resources to evaluate rental home dangers, you can learn about these risks and insure your vacation home accordingly.
Written byRyan Hanleyon Monday, 05 September 2016 3:06 pm
Author:Ginger Eisenrod Phone: 561-706-2586 Dated: September 6th 2016 Views: 120 About Ginger: ...
View our latest blog posts in your RSS reader. Click here to access.
Buying or selling a home is one of the largest financial decisions you will make in your lifetime, and the Ty Fraley Home Team is the best choice of professionals to help you with your needs. We have been involved in hundreds of real estate transactions helping buyers and sellers realize their goals. Whether you are a first time buyer or a seasoned veteran, we’re here to help make this easy for you. We pride ourselves in listening to your needs and working together to get you exactly the results you want. We work with professionalism and integrity. In fact Ty Fraley is a chairman of the Professional Standards and Ethics Committee in the Palm Beach County Board of Realtors. If you want to be treated honestly and respectfully, you’ve come to the right team. We have many years of experience with waterfront property, country club golf communities, luxury condominiums, and family oriented neighborhoods. These times can be a very stressful, and we pride ourselves in removing you from the chaos. Whether you are moving from around the world or around the corner, we help guide you through the entire process. We also have a tried and true network of help, from financial planners to trustworthy contractors. Because we understand and care about you, you will never be a number with us. You are dealing directly with the owner and broker of Southeast Realty. The thing we find amazing ourselves is that over 80% of our business comes from referrals of past clients and repeat business. Our clients are welcomed into our family where we frequently keep in touch and are always available to you for any future questions you may have. It would be our honor to work with you, and we look forward to a long lasting relationship.