What you need to know about insurance on a vacation home
If you’re one of the many Canadians who love to spend the summer at your home away from home, your cabin in the woods, or your beach house (also known as your vacation home), you need home insurance.
Some people think you don’t need additional insurance on your vacation home because you don’t actually live there year round. However, the exact opposite is true. In fact, since you aren’t living at your vacation home 100% of the time, it’s more of a reason to make sure your property and personal belongings are protected.
How to purchase insurance on a vacation home
Often, you can purchase insurance on your vacation home under your primary homeowner’s insurance policy. If you purchase a seasonal home, the first call you make should be to your insurance provider to ask about adding on new insurance. Many insurance companies offer discounts for having multiple policies with them. When it comes to insurance on a second home, some providers won’t offer it unless you have your primary residence policy with them as well.
If you’re not happy with the policy options or the cost of insurance premiums on your second home, you can always shop around for better insurance rates. Just remember that you may be shopping for two homes instead of one.
What type of home insurance do you need?
The type of insurance you need for your seasonal home depends on a variety of factors, including the structure of the home, the year it was built, and the personal property you keep inside the home. In a nutshell there are three different types of policies available for second homes:
- Comprehensive insurance covers both the structure of your vacation home and the contents inside, unless they’re specifically excluded in the policy. This is also commonly known as all-perils insurance. It’s important to read the fine print with comprehensive insurance because you may be under the assumption that all items are covered under any type of situation. However, there are limitations such as certain natural disasters, acts of terrorism, and "Acts of God".
- Basic insurance is the a la carte version of a home insurance policy. It lets you pick and choose which items, and under which situations, you want to be covered. The premiums are usually cheaper than comprehensive coverage. You may choose to include fire damage and theft, but not water damage. Talk to your insurance provider about the structure of your vacation home, including electricity from a generator, water from a well, or septic tank plumbing because those are all things that can have specific insurance needs.
- Broad insurance is a hybrid of comprehensive and basic policies. Similar to your home insurance policy, the amount of coverage you need on a vacation home depends on what you have and where you live. You may want comprehensive insurance for the structure and basic coverage for the contents.
Before you make a decision about insurance for your vacation home, determine your needs and talk to a professional to determine which type of insurance is best for you.