A standard home insurance policy may not be suitable for your second home. To get the cover you need, you may need to purchase a dedicated second home insurance policy.
Why Standard Home Insurance May Not Cover Your Second Home
Home insurance policies will only usually only cover occupied properties. If a home is unoccupied for long periods, then it may be more vulnerable to fire, theft, or vandalism.
For one reason or another, it is likely that your second home will be unoccupied for extended periods throughout the year. This means you will need a separate second home insurance policy if you want any cover at all.
There are other reasons you might need specialist second home insurance, depending on how you use it:
- Is it a renovation project, which you later intend to sell?
- If you only live in it for a few months of the year, who lives in it the rest of the time? Do you let it to tenants or holidaymakers? Or do other members of your family live there?
Any of these situations will create certain risks that may not be covered by a standard home insurance policy.
Do You Need Second Home Insurance?
There is no law saying that you must get second home insurance for any properties that are not your main property. But that said, mortgage lenders will require you to get some level of buildings insurance for any property you acquire. And even if you do not work with a third party funder, second home insurance will provide essential protection for your property investment.
Second home insurance is particularly useful if you plan to let the property to tenants. If any of these tenants injures themselves on your property, your second home insurance policy could include some liability cover, which can help meet any legal fees or medical expenses that may arise. Plus, your second home insurance can include a level of rental income protection.
What Does Second Home Insurance Cover?
A second home insurance policy can include:
- Buildings Insurance – Usually, mortgage lenders will specify that you need some level of buildings insurance as a minimum. This will cover the property’s structure, along with any fixtures and fittings, for damage from fire, storms, floods, vandalism, and other specified events.
- Contents Insurance – This will cover the property’s contents, including furniture and personal possessions, for loss or damage from specified events.
- Liability Insurance – This can cover any accidents or injuries that may occur on the property. This form of cover is particularly important if you are renovating the property, as it can cover contractors for onsite injuries. Or, as we mentioned above, it can also cover any tenants for certain accidents and the resulting costs.
- Other Optional Extras – Above, we mentioned how your second home insurance can include some rental income protection. Depending on how you use your second home, other optional areas of cover can include accidental damage cover, home emergency cover, and cover for personal possessions while you are not on the premises.
How To Insure a Second Home
Many insurers offer specialist second home insurance policies for high net worth individuals.
The level of cover you get, and the premium you pay, will depend on a number of factors. These will include:
- The property’s location (as different areas will have different flood risks and crime rates)
- The property’s rebuild costs
- The way you plan to use the property
- Renovation projects
- Rental arrangements
- Long periods of unoccupancy
James Hallam is an independent Lloyd’s broker with a dedicated team of experienced insurance professionals who specialise in protecting your assets. Talk to us about your second home, and how you intend to use it, and we can help you get the right level of second home insurance to protect your investment against all risks.
Find out how we can help you today.