Filed Under:Agent Broker, Personal Lines Business

Home Sweet Second Home

From property use to market values, second homes present coverage challenges

One of the most common of American dreams is home ownership, which has been challenged by the economy over the past several years.

Over the years, we have all heard that the three most important factors in choosing a home are location, location, location. Many of our customers have been fortunate enough to be in the financial condition to consider purchasing a secondary or vacation home. Never is the location factor more critical than when purchasing a secondary home. However, consider other important factors when entering the secondary home market, including the insurability of the home. The unique risks involved with insuring these properties is what will be addressed today.

Parallel to that, the most common claims we have during the winter are due to frozen pipes and the resulting water damage. Keep in mind that in most of these cases, if the home’s plumbing was not professionally winterized, or if a minimum required temperature in the home was not maintained, there will be no coverage due to freezing of pipes.

To help cover against an E&O exposure, send a reminder to insureds to have their water turned off and professionally winterized during the time that their home is unoccupied. Recommend easy turn on/turn off water systems and heat monitors to help prevent claims. Anything you can do to make sure your insureds are prepared for these situations will go a long way in protecting both your agency and your customers.

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