When shopping for a second home insurance policy, or a vacation home insurance policy, it's important to take into account a number of aspects, including how the property will be used. For example, if you want to rent it out, you may be required to get insurance that covers a full replacement in the case of a calamity like a fire or a hailstorm. In the case of a severe catastrophe or other tragedy, the coverage offered by a conventional homeowner's insurance policy may not be enough if your rental property is also owned by you. One option to consider would be renter's insurance.
In addition, make sure you have enough liability insurance to cover yourself and your loved ones in the event of an accident at the secondary residence. Umbrella insurance provides additional protection in the event of a lawsuit arising from injuries caused on your property.
Last but not least, you could wish to supplement your coverage with disaster insurance in case of a hurricane, flood, or earthquake. These types of calamities are often not covered by standard homeowner's insurance plans. If a major storm hits and your insurance company refuses to pay for the damage, you might be in a bind financially.
Buying a second home, whether for yourself or as an investment, is quite similar to purchasing a primary residence. To protect yourself financially in the case of a disaster, such as a fire or flood, make sure your new home is insured for the full cost of repairs and living expenses. Specifics of a secondary residence's layout are driven by its function. If you're trying to keep your money secure, it's a good idea to see a financial advisor to make sure you haven't missed any important avenues of protection.
