Thinking of buying a second home for investment or retirement?

If you are planning to retire or you just want a second property as an investment, there are many issues to consider before you call the local realtor to begin your search.

From an insurance coverage perspective here are a few tips:

If you plan to rent or lease the property you will need to buy a rental/dwelling policy. This will carry a higher premium than an owner-occupied home which necessitates a homeowner policy. If you are renting out the property, your liability exposure is also higher because you have guests using your property. We always recommend buying an umbrella policy which provides a minimum of S1million of excess liability for your asset protection.

If you are buying a home in a coastal area, be wary. The prior owner may have purchased the home 20 years ago when the insurance markets were open for business. The story may be very different today, as carriers have stopped or limited their writing of new policies. New carriers may have come into the market, but their financial strength may be weak.

In the event of a major catastrophe, an insurance carrier may go bankrupt leaving you exposed to loss. Our advice is to always secure a written insurance quote before closing on the property. Be sure to request the financial rating of the carrier from the insurance agent. And, finally, ask the agent about the Guaranty Fund of the State in which you buy the property. If your carrier goes bankrupt, this is your last resort for claim payment.

Coastal property is highly prized for its beauty and lifestyle amenities. Insurance carriers see wind and water exposure on coastal properties as high risk, prone to large losses and unprofitable long term. You need an agent you trust to guide you through these issues.

For questions about insurance for your particular needs, reach out to our experienced agents at Blasius Personal Insurance. Call 203-527-6002, or fill out the quote request here, and we will call you.