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

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

The most popular geographic areas to invest in a secondary homeare along America's coastal regions, scenic rivers and lakes, or inmountainous regions. Focusing on the secondary coastal homemarkets, the primary challenges insuring these homes include:

• Type of ownership, or named insured
• Use of the property
• Liability exposure
• Market value versus replacement cost
• Personal property
• Carrier appetite and capacity.

Most of the aforementioned regions will have several of the samerisk management issues and each will have some unique to theirlocations. While mountain and lake regions may face unprotectedfire districts, coastal and river areas will face flood pronerisks.