Buying 2nd Home Insurance

When buying a second home it is important that the home buyer purchases insurance to cover the potential loss and liability of proper financing for the home.  Insurance for a second home is usually more expensive than insurance for an owner-occupied property because fear of robbery or vandalism is higher when the property is empty simply because there is no one in the home to protect it.  The fact that the property is vacant does not make it any less at risk for various types of potential disasters like flood, fire or vandalism.

Components of Property Protection

Homeowners Insurance combines various personal insurance protections which can include:

• Liability insurance for accidents that may happen at the home
• Loss of other personal possessions of the homeowner
• Loss of Use
• Losses occurring to one's home
• Losses to the home’s contents
• Other structures on the property
• The dwelling or building

Other Protections

Other protections, available as endorsements at additional cost, can be:

• Guaranteed replacement cost coverage – Policy that pays for the full cost of replacing damaged property without a deduction for depreciation and without a dollar limit
• Extended/Enhanced replacement cost coverage – covers the amount of a loss to your home that exceeds the coverage limits you purchased as specified on your policy declarations page
• Inflation Guard – Automatically adjusts your home insurance limits during your policy period so they are at 80 percent or more of your home's replacement cost, which is the amount most home insurance companies require you to have
• Scheduled personal property – provides coverage for loss or damage to certain categories of personal and business personal property items whose value or risk potential exceeds the personal property coverage available under homeowners insurance
• Theft coverage protection – theft coverage protection broadens theft coverage without requiring proof of forcible entry
• Credit card forgery and depositor's forgery coverage – If your credit cards are lost, stolen or used without permission, or if someone forges a check or promissory note, then coverage applies

An umbrella policy is a necessity in order to provide an amount of general liability and it must be noted that some insurance companies may offer savings for protections in the home such as alarm systems.  Likewise, it is important to note that a consumer needs to purchase separate hazard insurance in order to protect against unforeseen circumstances such as earthquake, flood, or war.

Getting Financial Help

As always, a qualified professional should be contacted whenever an investor needs financial help and it is integral that a consumer contacts a qualified professional or his insurance agent with any questions that he may have.  Please consult with an agent specializing in property insurance to answer your questions.