Insuring Your Vacation Home
Written By: Brandy Enger, Director of Personal Lines – Vizance
We connected with Vizance’s Director of Personal Lines, Brandy Enger, to discuss a common insurance scenario we run into with our clients: vacation home insurance. We wanted to learn more about what she sees as the most pressing issues facing clients who have invested in a vacation or secondary home. We also wanted to get some advice about how to minimize the risk associated with these properties. Here are her thoughts:
How do insurance companies view vacation homes from a risk perspective?
Vacation homes are typically viewed as being high risk by insurance companies because they are frequently uninhabited and more susceptible to claims. For example, if you have water damage in your vacation home, it may take longer to detect the damage, increasing the likelihood of the insurance company having to pay out a large amount on a claim. The good news? You can reduce your insurance expense and provide additional peace of mind by installing water shutoff devices and/or alarm systems.
Should I rent out my vacation home?
Renting out your home is a great way to offset the cost of vacation homeownership, but the additional insurance expense required to cover this exposure is costly. Additionally, not every insurance company offers coverage for short or long-term rentals, so you may need to rewrite your entire insurance program in order to accommodate this new venture.
What are some common mistakes you see with vacation home policies?
The most common and costly mistake that clients make is not ensuring that the insurance policy covering the home is written in the name(s) of the individuals who actually own the property. If the home is purchased by multiple family members and placed in an LLC, it’s important that the policy covering the property is also written in the name of the LLC, in order to provide the proper protection for its members.
What else do we need to consider?
Most vacation homes also include vacation vehicles (i.e., boats, ATVs and golf carts), making homeowners especially susceptible to liability for injuries that occur on their property. Beyond securing policies to cover these items directly, it’s also important to consider the potential for injuries when ATVs, boats and other watercrafts are in use. In all likelihood, the liability coverage limit provided directly on the vacation home policy is not sufficient. It’s critically important that owners of seasonal homes purchase umbrella insurance to protect their full assets in the event of a tragic event.
I encourage you to discuss all the details of your situation with your trusted insurance advisor to ensure you have the depth of coverage you need. Then, get out on the lake and relax!
VIZANCE is a privately-held independent insurance agency offering a broad portfolio of insurance and risk management solutions for individuals and businesses. Since their founding in 1978, they have seen significant growth, particularly in the personal insurance space. This is attributed – in part – to their consultative approach to insurance, as well as their unique ability to provide custom-tailored solutions to their clients.