Do you own a second home, a rental property, or vacation home?

Ask an agent about insuring secondary residences, rental properties

If you own a secondary/vacation home or a rental property, you should talk with an insurance agent to be certain you are purchasing appropriate protection against a loss, yet not overpaying for coverage you may not need.

An agent may likely suggest what’s known as a dwelling fire policy. This type of policy usually covers just the structure itself, although you can add additional protection for other structures, personal property in the structure, or situations where you might be liable for injury. Dwelling fire policies are most commonly sold to landlords to cover rental properties. That’s because the tenant is typically responsible for insuring their personal possessions; the landlord is just responsible for covering damage to the building, and perhaps some liability.

An insurance company considers the place where you live most of the year to be your “primary residence.” If you have your primary residence insured with the most commonly purchased homeowners policy (known in the insurance industry as an HO3), then you have coverage for the house itself; structures that may be on the property but not attached to the main home, such as a shed or gazebo; the personal items in your home; and liability coverage in case someone is injured on your property. Don’t assume that the homeowners policy on your primary residence extends coverage to a secondary residence, such as a vacation home or cabin. Most likely, it doesn’t.

A dwelling fire policy is often a good answer to insuring secondary properties where you want the structure to be covered from certain types of damage, but don’t have many, if any, personal items there to cover. While such a policy doesn’t provide the broad coverage you would have with an HO3 policy, you likely won’t need as much insurance for a place where you spend little time. And, as noted above, you can always add personal property coverage or liability coverage, if needed. Your agent can assess your needs, and help you build a program that best suits your situation.