Protect Vacation Home From Disaster
Many people struggle to own one home, but others play their cards right and wind up with a lake cabin or vacation hideaway. If you’ve worked hard all your life to earn this type of luxury, you want your investment to be safe. What protects your home-away-from-home from storm damage, theft, or other losses?
If you think it’s the insurance policy on your primary house, think again. That policy only partly protects your vacation home, says Kip Diggs, a spokesperson for State Farm Mutual Insurance Company. Here’s what’s covered — and what’s not — by your main homeowners policy.
- Personal liability. If someone slips and falls on your vacation property, the insurance on your first home would cover the claim.
- Contents. Not so for all the furniture and personal belongings in your vacation home. “If you want coverage for the home’s contents, you need to get a separate homeowners policy,” warns Diggs.
- Structure. The same goes for protecting the building from damage. If a tree falls on the roof of your second home, your first home’s policy won’t cover the repairs. “Basically, you’re out of luck,” he says.
Buying a separate homeowners policy for a vacation home makes sense for most people, and the lender may require it if you carry a mortgage. Generally, you’ll need the same kind of policy as you have for your primary home, and you can shop for it the same way.
Check with your current insurer. “I’d say it’s almost a no-brainer to start there,” says Diggs, “especially if you are satisfied with the level of service and what you are getting for your money.” You might also snag a discount buying both policies from the same company.
Shop around. “On the other side of the coin, it might be a good time to look at another insurer,” he adds, “since you are doing the research anyway.” Compare prices for the same policy with several other insurance companies. You may find better value and service with another carrier.
Consider additional insurance. Homeowners policies have limits on what they cover. Diggs warns that if you keep costly items like jewelry, antiques, or a boat on your vacation property, you may want to insure them separately. A personal articles policy, for instance, would cover certain valuables. Your agent can help you decide if you need a specialty policy, and which kind to buy.
© FCA
Excerpt from FC&A’s Personal Finance for Seniors.
