Back in 2000, the U.S. Census Bureau determined that there were nearly 3.6 million vacation properties across the country. Nine years later, that number had increased to 4.86 million, and there’s been no sign of a slowdown in secondary property purchases.
An estimated 80% of these properties are bought as vacation homes and 25% of those who buy for this reason intend to make the property their primary residence upon retirement. Nowhere is this trend more evident than in Florida, where nearly 78,000 new retirees took up residence in 2015.
Whether you’re buying a family getaway, a rental property to augment your current income, or your future retirement home, there are four good reasons to ensure the property once it’s officially yours.
- Homeowner’s insurance doesn’t typically extend to secondary properties.
Depending on your provider, your standard homeowner’s insurance most probably will not cover secondary properties especially if you intend to rent it out for additional income. Even if it does, it may not offer sufficient coverage. At any rate, taking out a specially tailored separate policy for second homes is a wise move- depending on intended use, it might have some insurance issues that your primary residence doesn’t, such as loss of rental income.
- The property may be empty for long periods of time.
If the secondary property is going to be a vacation home for the foreseeable future, it will be vacant for most the year. Lack of regular tenancy means that no one will probably be there if a fire breaks out, a pipe bursts, or vandals break in. If any of these events happen, a valid insurance policy will minimize any resulting losses.
- Properties in rural areas have limited access to resources.
Even if you are present when fire breaks out or another disaster strikes, your property may be in a secluded area where timely help is impossible to get. If the home is insured, any damage that takes place before the police or fire department arrive will be covered, allowing you to rebuild without added expense.
- Tenants and guests may be injured on the premises.
If you rent out your second property or use it as a guesthouse, you could be liable for injuries to tenants and guests on the premises or be forced to cover repair costs yourself if they damage the property. Insurance can not only protect you in a personal injury lawsuit, it can also compensate you for loss of rental income until the property becomes habitable once more.
How much insurance you should take out will depend on circumstances unique to your property, but a policy will protect you financially if problems ever occur. For more information or to schedule a meeting to discuss coverage needs for a second property, contact We Insure Agent Rick Leal today. Rick will work with you to create an insurance package that protects the home even when you’re not there full-time, leaving you assured that your investment is fortified against the unexpected.