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.

The most popular geographic areas to invest in a secondary home are along America's coastal regions, scenic rivers and lakes, or in mountainous regions. Focusing on the secondary coastal home markets, 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 same risk management issues and each will have some unique to their locations. While mountain and lake regions may face unprotected fire districts, coastal and river areas will face flood prone risks.