3 Reasons Your Second-Home Policy Will Cost More

Owning a home is the epitome of the American dream. But for some Americans, owning another home is the ultimate goal. For those of us in the Boston area, it’s alluring to imagine a country home for family gatherings, or a coastal house for summer celebrations.

insurance photo
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If you can swing it, go for it; it’s well worth it. But it’s important to know that your homeowner’s insurance—which you’ll be paying with your monthly mortgage checks—can be higher for your second home than it is for your first. Here are three reasons why:

1) You’re Renting it Out

A large number of second-home buyers plan on renting the house out for part of the year in order to cover the extra costs. This is a great plan, but keep in mind that you might need to purchase a landlord policy, which costs more. How much more? Up to 20% higher than your standard coverage. Of course, this is actually a good thing; the insurance will ensure your property is protected from rental wear and tear, and further protects you personally if a renter is injured on the property.

2) You Won’t Always be There

Of course you won’t always be there—there is a second home, after all. And since you won’t be there all the time to keep an eye on things, noticing leaks, fire, or even break-ins immediately after they occur, your insurance company assumes there are increased chances for greater damage. Again, this not only protects the insurance company, but you as well, so it’s worth it in the end.

3)  You’ve Got Nature to Contend With

Whether a cozy country retreat or a Cape Cod waterfront dream, you see the natural surroundings as the home’s greatest asset; your insurance provider sees risk, risk, risk. Hurricanes, flooding, winds, and even mudslides become factors in certain vacation-home spots, which ups the insurance costs. Once again, protecting your investment is worthwhile and critical, but it will cost you.

When you’re considering these factors, consider this as well: you don’t have to navigate it alone, and you can and will be well advised. When you sit down with your mortgage broker to find and apply for a mortgage, he or she can help guide you toward the right insurance provider and policy. After all, mortgage professionals do this every day.

Once you’ve secured a mortgage and gotten the right insurance in place, it will be smooth sailing—or skiing, hiking, swimming, or simply relaxing.

If you’re buying or selling a home in the Boston area and are in need of a mortgage, or have any mortgage-related questions, contact me at any time for advice or help.

Phil Ganz (354 Posts)

Philip D. Ganz is a Boston Mortgage Broker and Boston Home Loan specialist. For information, expertise, consulting, or advice about home loans, refinancing mortgages, or commercial property loans, contact Phil with no obligation: 617-529-9317

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