A recent story in The Record (New Jersey) stated that:

“For current and potential second-home owners, making sure your property is adequately insured can be a less-than-straightforward process. Second homes can be inherently more expensive to insure, primarily for two reasons: You’re not there as much, and they are often rented out (some insurance companies deny coverage if the home is regularly rented).”

Insurance for second homes are increasingly more scrutinized by underwriters, and as a result, second home insurance costs are rising, if not being denied, because of perceived unacceptable risks (by insurance companies).

However, there are a few things second home owners can do to mitigate their insurance costs. Among them are:

• choose an area for your second home that is not located in the flood zone (see FEMA maps for identification of these areas), or is not susceptible to frequent/regular hurricanes and/or tornados;
• consider the security that a ‘gated’ community would offer, with the associated warning to stay out of known high crime areas;
• rethink your plans to rent your second home for part of the year, which puts you in a sometimes higher risk category with the insurance company…with the associated thought of having a property manager that might help to lessen the perceived risk.

Not to mention more insurance when trying to make your current policy less expensive, but you might want to consider an ‘umbrella’ policy which is designed to offer you greater liability/accident coverage than what you have in your home owner’s policy.

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Filed under: Insurance