Homeowners Insurance Policy for the Cabin - Part

Editor’s note: This is the third in a series of insurance FAQs. There is no doubt that cabins hold emotional value for owners, but they also hold great financial value that needs to be properly protected. Because of the special nature of vacation homes, when it comes time to sit down with your homeowners insurance agent, you may want to ask a few questions about unique considerations for insuring your place.

Q: Am I more susceptible to personal liabilities due to the recreational nature of my second home?

A: Homeowners are always at risk for personal liabilities for injuries that occur on their property, but with boats, ATVs and other recreational equipment, cabin owners are especially affected. You may want to consider adding an extra cushion to your insurance policy by purchasing an umbrella policy: coverage that comes into effect if you reach the limit on your policy’s underlying liability coverage. An umbrella policy even protects you from such things as libel and slander. For about $150 to $300 per year you can rest easy with a $1 million personal umbrella policy.

Q: Is my dock covered under homeowners insurance policy?

A: Detached structures like docks are typically covered under a standard homeowners policy, and the policies typically cover 10 percent of the value of your home. For example, if your cabin is valued at $200,000, then your coverage limit for detached structures is $20,000.

^{SOURCE: Loretta L. Worters, Vice President of Communication for the Insurance Information Institute, www.iii.org.}

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