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Everything You Need to Know About Vacation Home Insurance

Vacation home insurance functions as typical homeowners insurance. However, there are usually more factors to consider, like location-based hazards and rental implications.
Vacation home insurance functions as typical homeowners insurance. However, there are usually more factors to consider, like location-based hazards and rental implications.

If you own a home, you’re already familiar with the process of purchasing home insurance to protect your home. If you decide to buy a vacation home, do insurance companies treat it any differently?

Unfortunately, insurance companies treat your second home like it’s your only home. Therefore, the closing process is the same as your primary residence and you will be required to purchase a separate homeowners' insurance policy.

There are important factors to consider when picking a policy for your vacation home that may differ from your first residence.

We’ve put together this easy guide to point you in the right direction.

The Most Important Things To Consider When Purchasing Vacation Home Insurance

Here are the first few things to think about when you want to buy vacation home insurance:


When you are trying to think about what kind of policy you want to buy, the first thing you need to think about is where your second home is located. For some reason, beautiful vacation homes often come with an element of risk. This is often because they are in tropical or subtropical regions.

So, you should think about the risks you need to be covered by your insurance, like flooding, high winds, earthquakes, etc.

Property Type

Is your home a single family residence, a condo, or a townhouse? These are important things to consider because, for example, a condo in Florida is going to have lower costs than a single-family home in the same location.


Does your second home have a pool, hot tub, sun deck, guest house, etc.? While these amenities are fantastic for holidays and add value and fun to your home, they can also add costs to your insurance and are important to consider when picking a plan.


If you plan on renting your home out to other people, be it through short-term home sharing sites like Airbnb or HomeAway, or to long term tenants, becoming a landlord comes with high insurance costs.

What Kind of Policy Should You Purchase for Your Vacation Home?

Once you’ve assessed the factors that could impact your policy, it’s time to choose that’s right for your situation.

While it’s always a good idea to talk to your insurance agent about your specific circumstance before you make a decision, here are a few types of common policy coverages that you should make sure that you ask about:


This one is especially important if you plan on renting out your home. This is because it covers incidents like personal injuries experienced by your guests or anyone at your rental property. So, if someone gets hurt, you won’t be on the least not completely.

The Home’s Contents and Structure

You want to make sure that your home‘s structure is protected. If you have any of the amenities we mentioned before, these could also be included in this portion of the policy.

Lost Income

If you plan to rent out the second home, this portion of your policy can reimburse you for any lost income as a result of not being able to rent out your home for a period of time for any reason.

Natural Disaster

Coverage for damages from natural disasters is often not covered by basic insurance policies, so be sure to speak with your real estate agent about what the common risks to your area are, so you can prepare accordingly and buy the right types of extra coverage.

Choosing a policy for your vacation home can be difficult, so make sure to seek the proper help in making the right decision. Consult your real estate agent or insurance expert to learn more about picking the best policy for your second home.


Ben Mizes

Ben Mizes is the co-founder and CEO of Clever Real Estate, the free online service that connects you with top agents to save thousands on commission. He's an active real estate investor with 22 units in St. Louis and a licensed agent in Missouri. Ben enjoys writing about real estate, investing, personal finance, and financial freedom. He's a serial entrepreneur, having run several successful startups before Clever Real Estate. Ben's writing has been featured in Yahoo Finance, Realtor News, CNBC, and BiggerPockets.

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