How to Avoid Mistakes When Purchasing Homeowners Insurance for Two Homes

a cabin the woods

Reading time: 5 minutes

Who doesn’t love the idea of a cabin in the woods for a snowy holiday or a place down at the shore for the summer? A seasonal or vacation home is one of life’s amazing benefits, but insuring it properly can be a challenge.

We reached out to Katie Unruh Vang of Unruh Insurance Agency, who has been part of the insurance industry for more than 18 years. Katie specializes in personal insurance and gives us the ins and outs of vacation home insurance, including why you may want to shy away from a wood-burning stove.

Secondary home insurance essentials

a beach house sits on the edge of a large lake with the summer sun overhead
Yes, you need insurance for your vacation home.

You might be wondering, “Do I need insurance coverage for my vacation home if I already have homeowners insurance for my primary residence?” The answer is, unequivocally, yes.

“All the insurance carriers we work with require a separate policy for vacation or seasonal homes,” says Katie. “Many call it a secondary residence or seasonal residence.”

Seasonal home insurance coverage varies by carrier, and every carrier will have their own rules and regulations when it comes to the type of coverage needed.

This is especially important when it comes to the different types of vacation or second homes, such as a cabin in the woods or a house by the beach.

Summer home insurance (by water)

“A lake home or a home on the coast or near a body of water might need to consider a separate flood policy,” says Katie.

For a coastal policy, an insurance company can require a higher wind and hurricane deductible as this vacation home may have a higher risk of this type of damage.

What you need to know about seasonal cabin insurance

a closeup of the arched roof of a cabin in the woods
Be wary of wood-burning stoves.

A cabin runs the risk of plumbing or sewer issues, even if the home is not hooked up to a public system. A wood-burning stove as the only heat source in a cabin can cause additional issues with underwriting.

“There’s an increased fire risk,” explains Katie. “There’s also no heating on if homeowners are not staying there.”

This can lead to an increased risk of freezing pipes, which is the third most common homeowners insurance claim, according to the Insurance Information Institute.

Says Katie, “If you have a central heating system, you can set it to turn on, but with a wood stove, you can’t do that.”

Power sports and additional vehicle coverage

a golf cart sits on the beach before a volleyball net
Vehicles require additional coverage.

Vehicles such as ATVs, snowmobiles, golf carts, and even boats require their own insurance policies.

“Your insurance agent can give you quotes for those types of insurance policies,” says Katie. “Most likely the vehicle is not covered if there’s damage or if you’re out on a trail somewhere away from the property and have a collision.”

The separate insurance policy can cover property damage, bodily injury, collision, and other expenses. Talk to your insurance agent to find out what coverage you need for your specific power sports vehicle.

Don’t forget your umbrella coverage for a rainy day

a person holding a pink umbrella in a heavy rain
Ask your agent about an umbrella policy.

Umbrella coverage is recommended if you own a car and home but is even more strongly encouraged if you own any additional property.

“If you’ve got a couple properties, it’s good to have that covering you,” says Katie.

Umbrella coverage is additional coverage in increments of $1 million that provides personal liability coverage. It delivers higher limits on your existing coverage and protects you for incidents that are not included in your homeowner or auto insurance policies. These incidents include certain lawsuits, personal injury to others, property damage, and personal liability issues. Legal fees are also covered by umbrella insurance.

Coverage for guest stays and renters

two suitcases sit outside a house while a dog stands in the doorway
Talk to your agent before welcoming guests to your vacation home.

You’ve invited your friends to stay at your cabin since you won’t be able to make it this weekend. Are you covered?

“If it’s a guest and you’re not charging rent, that’s a case by case basis with insurance companies,” says Katie. “Discuss that with your agent.”

We recommend you do that before buying your home, so you have the correct seasonal home coverage from day one.

If you’ll be renting out your cabin or beach house when you can’t be there…

“That’s a whole other topic,” laughs Katie. “Again, discuss this with your insurance agent to make sure you have the property properly insured. If you use Airbnb or VRBO, let your insurance agent know and they can assist you with the correct way to insure the home. Many different insurance companies are able to cover these properties.”

The coverages you haven’t thought about that you need to

a hole the size of a baseball is in a broken window
Check to make sure your vacation home is covered for vandalism.

Don’t forget to check for vandalism and theft on your vacation home insurance policy.

“With any seasonal property, it’s important to ask your agent if they’re included,” says Katie. “Some basic seasonal insurance policies don’t include them.”

Learn tips to secure your home in ‘Tis the Season to Secure Your Home from Burglars and Porch Pirates.

If you’re looking to save, talk to your insurance agent about new coverage offerings, such as underground utility line or underground service line coverage.

“It covers your utility lines that the utility company doesn’t cover,” explains Katie. “Digging up and replacing these can be really expensive.”

a HVAC unit outside a home on a concrete slab
Add a policy that covers your home systems.

Another new policy endorsement some insurance companies offer is equipment breakdown coverage, which insures your heating system, heat pump appliances, air conditioner, etc. for repair or replacement.

“It’s similar to a warranty where if these systems break down for almost any reason, they would be covered,” says Katie.

This coverage can be extremely helpful for vacation homes that aren’t occupied year-round, where heating and cooling breakdowns may be more likely to occur.

How to save on multiple policies

a Google hub, camera, and another smart device sit on a kitchen counter
Consider adding sensors to your home.

Your home insurance costs may be high with multiple polices, so if you’re looking to save, try bundling, limiting items in your vacation home, and adding water sensors, burglar and fire alarms.

“Try to purchase your seasonal home and your primary home insurance where you have your car insurance,” says Katie. “You’ll get bundling discounts.”

Katie also notes that’s not always possible as seasonal homes can be difficult to underwrite, so not all companies carry these policies.

You can also save money by limiting the items in your home to the necessities.

“If you don’t have as many contents at your secondary home, you can talk to your agent about lowering the personal property limit at the secondary home,” says Katie.

a man and a woman in business suits go over paperwork
Review your policy with your agent.

When insuring your second home, consider a higher deductible as this would lower your premium. Your insurance agent may also be able to provide you with discounts depending upon the tech in your home. Some carriers offer discounts for smoke detectors, water sensors, smart home tech, and security systems.

However, Katie warns against discounts for the sake of lower premiums.

“Don’t compromise coverage to save a few dollars. Being properly covered at the time of loss is more important than saving some money.”

Also review your policy often, sometimes on an annual basis with your agent. If you make any changes at the property – such as renovations and additions – make sure to contact your insurance agent.

“It’s a little overwhelming sometimes with all things you have to think about,” says Katie. “Make sure to always discuss your policy with your agent.”

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