Vacation & Second Home Insurance

Vacation Home Insurance: How to Insure Your Second Home

Seasonal or second homes offer a respite from busy schedules and can be a good investment. At the same time, they present a greater insurance risk compared to your primary residence.

This is because you do not physically occupy your vacation home most of the time, predisposing it to greater danger of burglary, vandalism, and undetected damages, such as burst water pipes. The good news is a vacation home insurance policy covers all these risks. 

To avoid unexpected financial strain, it’s worth considering insurance coverage for your vacation home. However, before purchasing any insurance, consider the premium costs and what is covered. Various factors determine the cost of vacation home insurance, including location, type of property, and amenities available. In this post, the sages behind MoneyWizard simplify what vacation home insurance entails and what it covers. 

What is Vacation Home Insurance? 

Vacation home insurance is a type of homeowners’ insurance policy that provides coverage for a home you own but do not primarily occupy. Specifically, this refers to a second home that you only visit for holidays or special occasions. This insurance policy is derived from vacant home insurance, which is coverage for properties that remain empty for extended periods. 

Do I need a Separate Home Insurance Policy for my Vacation Home?

Homeowners insurance is designed to offer protection for your primary residence against financial losses in the event of emergencies, such as theft, fire, and other covered perils. If you also own another home where you go to unwind, your homeowners policy may not cover this separate property, and you may need to purchase a separate vacation home insurance policy. Such a policy will protect your home structure and the contents inside. If you have a mortgage, your lender may require that the property be insured.

Sometimes, your insurer may extend the liability coverage part of your existing policy to your second home. In such a case, should you be injured at your vacation home and found liable, payment for resultant medical bills or legal expenses are covered by your primary home’s coverage. Another reason why you need separate insurance for your vacation home is that second homes are deemed riskier. What makes a vacation home special and appealing to you— such as waterfront property—is considered a risk by your insurer. 

Similarly, second home coverage differs from primary home coverage as its coverage is limited. This is because insurance for second homes is written on a ‘named perils’ basis. That means coverage only applies to events specified in the policy, such as flood and fire damage. If damage results from a peril not listed in the insurance, the insurer will not cover it. This is unlike standard homeowners insurance in which coverage for perils is broader. As such, ‘named perils’ policies provide limited coverage for other structures on your vacation home; for example, sheds and boathouses receive less coverage at a vacation home than in a primary homeowners policy.

What Does Vacation Home Insurance Cover? 

You don’t live in your vacation home all the time. Therefore, instead of covering all the things considered for a primary residence, your insurer may construct your policy based on identifiable perils. The implication is that your vacation home policy will list a specific set of events eligible for coverage, such as damage from fire, smoke, lightning, explosions, and theft.

Liability coverage may be included to cover personal injuries should they be sustained while you’re on the property. The policy could include coverage for medical expenses that may arise. In other instances, if you already have a homeowner’s insurance policy for your primary residence, your insurer can extend coverage given for your primary home to your vacation home.

How Much Does Vacation Home Insurance Cost? 

Your vacation home insurance will likely be more expensive than your regular homeowners insurance. In the US, vacation home insurance premiums range from $2,000 to $3,000 annually. The cost is based on the type of coverage you need, plus several other factors. These include:

1. Location

Vacation homes in areas with a high risk for natural disasters—such as floods, hurricanes, fires, earthquakes, and mudslides—may command higher premium costs. 

2. Condition and age

Insurers factor in the general condition and age of your vacation home. An older property that has been poorly-maintained will cost more to insure than a newer and well-maintained home. 

3. Property type

The type of vacation home will impact insurance cost. For instance, a small mountain cabin will be cheaper to insure than a luxury beachfront home. The amenities at the property can also impact the cost. A vacation home with a swimming pool or hot tubs can command higher premiums as such amenities increase the insurer’s risk. 

It should be noted that secondary coverage might be necessary for a vacation home. For instance, if your vacation home is a beachfront property, you may want to purchase additional coverage, such as flood insurance to cover that specific risk. Such separate secondary coverage has limits as to what is and isn’t covered.


Even if the coverage cost for your vacation home exceeds that of your primary homeowners policy, it’s worth considering. This is because your vacation home is prone to risks that can lead to unexpected financial consequences.

Frequently Asked Questions

1. What is considered a vacation rental property?

A vacation rental property is a furnished property rented out on a temporary basis. This can range from a high-end property to a spare bedroom in your apartment. Such properties include apartments, homes, tents, condos, boats, yurts, and other professionally managed resorts. Vacation rental properties are becoming increasingly popular among those seeking to break away from the tradition of hotels for something more private and unique. 

2. Why is vacation rental property insurance more expensive than homeowners insurance?

The cost of vacation rental property insurance is determined by several factors, including your deductible, replacement value of the home, location, amenities, and amount of coverage chosen. Generally, vacation rental insurance is more expensive than homeowners insurance because the home is often vacant. There is also a higher probability that you will file a claim due to the occurrence of an insured risk. 

3. Does Airbnb provide vacation rental insurance?

Airbnb brings together people who want to rent out their homes with those searching for accommodations. For hosts, Airbnb offers the opportunity to earn extra income from their property, but comes with the risk of guests damaging the property. Typically, homeowner policies do not cover short-term rental claims, like renting on Airbnb. Also, short-term rental activity is not covered by group policies. Even if you opt for insurance on the short-term rental listing, coverage explanations are often vague and policies vary widely based on location.

Airbnb provides host protection insurance of up to $1 million in the event of accidental traveler injury and/or third-party accidental property damage. Due to the nature of this policy, Airbnb claims that these are not actual insurance policies, but only supplementary protection.