Insuring a Second Home
The biggest investment most of us make is the purchase of our home. It’s been the “American Dream” for generations. Owning more than one home can be part of a long term financial strategy or perhaps to have a “home away from home.” Many people acquire a second home, either as a vacation home, a home to retire to or to have to build out their portfolio. Find out the important facts on insuring your second home.
GDI Insurance Agency, Inc. has the experience you need when insuring a second home. Contact us today 209-634-2929!
What Coverage Options Are There?
At a minimum, your lender will require that you carry hazard insurance to protect your property against damage from fires, earthquakes or severe storms. It is also a good idea to add liability insurance, which covers you and members of your household for accidental injuries to your visitors. Opting for property plus liability insurance adds up to a standard homeowners insurance package. For an extra layer of protection, a personal umbrella liability policy extends your liability coverage for properties named in the policy.
Dwelling Fire Insurance
Since most homeowner policies require occupancy as a condition of insurance, the fact that you visit infrequently may preclude you from obtaining full homeowners coverage. Dwelling fire insurance is an alternate coverage option utilized in insuring residential rental or non-owner occupancy property, including vacant property.
A dwelling fire policy continues to offer coverage for a home and other structures (e.g., detached sheds or garages) for perils named in the policy. Named perils listed in a typical dwelling fire policy protect against damage caused by fire, collapse, lightning strike, wind, hail, explosion and smoke. For more coverage, consider adding personal property protection and liability insurance to a dwelling fire policy.
Renting Out Your Home to Others?
Whether your second property is an apartment unit or a family home, if you are renting the property, you will have little control over the physical damage that can occur in or on it. To mitigate your risks, tenant-occupied dwelling insurance will cover the costs incurred by damage, including fire, storms, burglary and vandalism. It does not cover your tenant’s personal property.
Renting your property furnished or unfurnished also has insurance coverage implications. If you are renting your property furnished, make sure to let us know. We can advise you on the best coverage options and whether you need to consider requiring longer-term tenants to carry additional renters insurance.
As with all homeowners insurance, it is important to be sure that there is enough coverage to protect all of your property values and assets when purchasing coverage.
Protecting Your Personal Property
You may be considering renting out your home for extra income while you’re away at your second home or for an extended period of time. Though this seems like an ideal solution for families with extra room to spare, it can pose liabilities. Take the following considerations to heart in order to protect your home.
Renting Your Home or Your Second Home
- Ask for references from potential renters, especially those that will stay for a while.
- Draw up a rental agreement that defines the terms of the rental, including restrictions, liabilities and occupancy guidelines.
- Request a security deposit that is to be refunded if there is no damage to your home.
- Advise GDI Insurance Agency, Inc. that you plan to rent out your home and ask about how this may affect your current coverage.
- Consider hiring a property manager to look out for your home if you are renting for a long period of time.
- Set aside a secure place in your home to store personal items, such as clothing and valuables.
- Take pictures of all areas of your home before the rental takes place in case damage occurs while you are away.
- Have your mail forwarded or held until you return.
- Provide your contact information to both the renters and your neighbors in case of an emergency.
Checking the references of potential renters is vital when determining if you will open your home to strangers. If you uncover any red flags while checking references, do not agree to rent your home, even if you are afraid of hurting someone’s feelings. Your first priority should be to protect yourself and your property.
Whether your second home is reserved for your private use or shared as a rental, it costs more to insure than your primary residence. This is because premiums are based on a variety of factors such the amount of time that your home will be unoccupied, its location and the liability from renting the property.
Depending on the location and type of second home, risk of earthquake, wildfire or even a pool can push up your premiums or make coverage difficult to obtain. If you are considering the purchase of a second home, contact us to learn more about the cost of insuring a second home.
California’s Leader in Insurance and Risk Management
As one of the fastest growing agencies in California, GDI Insurance Agency, Inc. is able to provide its clients with the latest and greatest of what the insurance industry has to offer and much, much more.
We are headquartered in Turlock, CA, with locations across the heart of California’s Central Valley, Northern California and beyond to provide a local feel to the solutions and services we provide our clients. We pride ourselves on exceeding our client’s expectations in every interaction to make sure that our client’s know how much we value and appreciate their business. Contact us today 1-209-634-2929 for your comprehensive second home insurance quote!