Having a second home has a lot of benefits, especially one that’s on the water. However, it’s important to know that lake house ownership doesn’t come without its challenges. A lot can go wrong with your home that’s built for relaxation. To protect your investment, you must be fully aware of the homeowners insurance concerns that come with it. Here are some that you need to be aware of.
Should You Get Two Separate Policies?
There are two ways to go about insuring your lake house. You can either use a single policy or get two separate policies. Some insurance providers provide policies that you can extend to two homes. However, for such a policy to work, you need to ensure that they cover the necessary forms of coverage. You can talk to your insurance agent to find out if it’s possible to extend your current policy to your second home. If not, you will have to get a second policy. The benefit of having a second policy is that it’s highly likely that your lake house will have hazards that the primary home doesn’t. Therefore, a second policy enables you to tailor your coverage to better suit the needs of the lake house.
Water Related Risks
There is a difference between living by the water and staying in a suburb. If your home is near a body of water, there is a real risk of damage. For instance, it’s more prone to damage by huge waves, hurricanes, and floods. All these threats can completely destroy your home. Apart from these huge threats, you should also be aware that nearby bodies of water can cause relatively minor issues like rust, mold, and damage from strong gusts of wind. Getting homeowners insurance means your home is protected from all these threats.
The majority of waterfront properties are considered high-risk for floods. Even if you are in areas that don’t usually get affected by floods, a body of water can cause floods at any time. If you own a lake house, you should definitely consider flood insurance. Unfortunately, a lot of homeowners’ insurance packages don’t cover flood damage. As such, you may need to get a separate flood insurance policy.
Fire is a common hazard in less-frequently lived-in homes. If you use your lake house as a vacation home, chances are you only go there from time to time. This means you won’t be there all the time to keep up with what will be happening. A small electrical fault in the home can instantly cause a fire. Apart from that, because the AC will be off, your electrical and plumbing can heat up. Worse yet, most lake houses are in secluded areas. This means it can take time for the fire department to get there. By the time they arrive and try to put out the fire, it may be too late. Most homeowners’ insurance packages cover fire damage. However, it won’t hurt to talk to your agent and find out if you are fully covered.
There’s nothing wrong with renting out your lake house from time to time. However, that comes with some challenges and concerns. Apart from the damage that can be caused by the renters, you also need someone to come and clean the place regularly. There is also the risk of theft. Unfortunately, a standard homeowners insurance policy doesn’t usually cover damage or theft if you rent out your lake house. You will need to talk to your insurance provider to find out what type of policy they can give you. Some providers have umbrella insurance, which can help protect against any injuries renters may sustain on your lake house.
Having a lake house can be a great way to have fun, relax and unwind. However, there are lots of hazards associated with assuming the responsibility of a second home. This is why it’s crucial to work with an insurance provider to ensure that your investment and wallet are protected.