How to Lower Your Vacation Home Insurance Premium

If you have a vacation home, you need to insure it. You’ll probably find that the rates for this home are higher. This is for one simple reason – risk.

Insurance companies take a higher risk insuring homes that aren’t occupied full-time. When someone lives in the home full-time, they are able to notice when things go wrong and need fixing. They can also help prevent burglaries and theft.

Does this mean you have to pay higher premiums? Luckily, there are a few ways you can keep your premiums to a minimum on this non-owner-occupied home.

Make Your Vacation Home Safe

A large part of the reason your vacation home insurance premiums are higher is because of the risk of liability. You can minimize the risk by adding certain precautions. A few of the most common include:

• Security system – Burglary and theft can be a big reason for higher premiums. Installing a security system lowers that risk, even if you are not near the vacation home. As long as the security system is monitored, the police are alerted to any issues within minutes, which can decrease the risk of severe loss.
• Don’t buy in remote areas – If you buy a vacation home in a remote area where no one is around for miles, anything could happen to the home and no one would know. Buying a home that is near others, though, increases the chance of someone noticing if the house is on fire or other perils occurred.

Any way that you can prove to the insurance company that you decreased the risk they take, the better your chances are of getting a lower premium.

Insure With the Same Insurance Company

If you stick with the same insurance company that holds policies for your home or car, you may be able to get a discount. Insurance companies often reward loyalty because it costs them less to offer you insurance than it does to advertise for new clients.

While you should shop around for the best rate, start with your current insurance company. Ask them about any discounts they offer if you insure your vacation home and principal residence with them. The discounts may make the premiums smaller than a new insurance company can offer you.

Take a Higher Deductible

If you can afford a higher deductible, take it. The deductible is what you pay if you have to make a claim on the insurance. For example, if you have a $500 deductible and your home is robbed, you would be responsible for the first $500 of the loss. The insurance would then kick in after the initial $500.

Make sure you think carefully about the size of the deductible you take, though. The available deductibles can get fairly high. For example, don’t take a $2,500 deductible if you don’t have an emergency fund set aside to cover this amount should you need it. The insurance will not become effective until after the initial $2,500. If you can afford it, though, every increase you make can lower your premiums, saving you money in the long run on your insurance.

Lowering your insurance premiums on a vacation home is essential if you want to keep the premiums affordable. Don’t settle for the first quote you receive and make sure you inquire with your current carrier to see what discounts they may offer. As always, compare the coverage to make sure you are getting adequate coverage for your needs and the risks you take with your second home.