Copeland Insurance


Best Types of Insurance On Second Home Rental Property

Owning a second home or vacation home can be a great investment and source of enjoyment. However, it’s important to ensure this valuable asset is properly protected through adequate insurance. Unlike a primary residence, a secondary property may face different exposures that require careful evaluation of coverage needs. Insuring a vacation home or second home correctly is essential to guard against financial losses in case of unforeseen incidents like fire, storms, or other damage. Without the right insurance policies in place, repairing or rebuilding costs could become an overwhelming burden. This guide outlines the key types of insurance ownership a second home may require. It explores options for both insuring the property itself as well as protecting against related liabilities. Considerations for different locations and rental activities are also addressed. By understanding insurance requirements specific to a secondary residence, homeowners can make well-informed choices to safeguard this important investment. With the right coverage and proper protections in place, a second home can continue providing years of enjoyment to its owners and guests. 9 Types of Insurance For a Second Home Rental Property Property Insurance Property insurance for a second home or vacation serves the same essential purpose as the vacation home insurance does for a primary residence – to help cover repair or reconstruction costs in the event the physical structure is damaged. Just like insuring a main home, there are two main types of property coverage available for a second home or vacation home insurance for homes when the vacation home insurance cost for a property: replacement cost and actual cash value. Replacement cost insurance policies will pay out the full cost to rebuild the home as new if damaged, using materials of similar quality. This is usually the preferred option as it ensures the owner has sufficient funds available to fully restore the property without depreciation adjustments. Actual cash value policies factor in depreciation and pay the current value of the items based on their age and condition. However, replacement costs may result in higher premium costs. A comprehensive property policy for a second home should insure the dwelling, as well as any other permanent structures on the property like detached garages or sheds. It can also cover personal belongings contained within the primary home under second-home insurance only. Additional coverage options may be available for outdoor structures, fences, landscaping, other structures and features, and detached items like jet skis or kayaks stored on the property seasonally. Property insurance limits should be set based on replacement costs, not just the purchase price, to insure and safeguard the property’s full value for repairs many years into an extended period of ownership. Liability Insurance Just like a primary home has first name homeowners insurance, that is first home insurance only, a secondary residence also carries a liability that requires protection. Liability insurance helps defend, and cover damages awarded if someone is injured on the property or from associated activities. The two main types of liability insurance coverage required are general liability and personal liability. General liability protects against claims of bodily injury or property damage to third parties on or near the premises. Personal liability covers suits anywhere in the world, such as if an individual suffers an injury while using watercraft kept at the second home insurance only. Adequate liability limits, usually $100,000 up to several hundred thousand, are crucial given the exposure. Umbrella liability policies for homeowners insurance can also be purchased to provide high excess liability coverage over the basic limited coverage limits above. Guests, renters, service providers, or others involved in accidents could sue for medical expenses and other costs. Liability protection is thus essential for everyday exposures as well as special events hosted at the property when crowds are present. Loss of Use Coverage While property insurance covers damage to the physical structure of the policy for your own second home insurance coverage, loss of use coverage addresses related costs incurred if the residents cannot live there due to covered repairs. This supplemental insurance for your second home insurance coverage policy pays additional living expenses (ALE) such as hotel bills, food costs, storage fees, and other relocation costs until the property is rebuilt or repaired after an insured incident. Loss of use coverage helps avoid additional financial strain during what is already a difficult time. The coverage typically allows for the fair rental value of the home or a set daily limit for living costs like temporary housing. Standard coverage may only apply for two years to allow for reconstruction, but extensions for extended periods can be added. For an income property generating rental income, coverage may also be insurance for your vacation home or two-second homes, purchased to recoup lost rent payments if tenants cannot occupy the second homes or the main residence during restoration work. With a rental home, this additional coverage helps offset financial obligations while repairs are underway. Renter’s Insurance Requirements If a personal umbrella policy is the only insurance policy used for your second home or beach house or vacation home that is rented out to guests on platforms like Airbnb, having proper renter’s insurance becomes essential to protect against liabilities in case of injury to tenants or their property. Renter’s or second home insurance policy that covers legal liability as well as theft, damages, and other insured perils to the property of renters themselves. This third homeowners’ insurance policy helps defend against claims resulting from incidents occurring due to issues with the security system of rented premises. In many areas, presenting proof of active renter’s or a single family second home insurance two-family second home insurance policy is required by local regulations for short-term rental properties. Policies typically cost a few hundred dollars annually and pay dividends if losses are experienced by transitory guests. Both liability and personal property coverage for rent and for personal effects are important, with minimum limits of $100,000 for liability for rent and full replacement of personal property coverage recommended. Umbrella liability may again

What is a Reciprocal Insurance Exchange Company?

Recently one of our Partner Companies, Tower Hill Insurance Group, started a new insurance company called Tower Hill Insurance Exchange.  The plan is to transition their current customers from Tower Hill Signature and Tower Hill Preferred to this new company. Why? There are three main reasons that they are doing this: The Florida Property Insurance Market is in dire straits. Currently, there is an increase of fraudulent activity. Shady contractors, public adjusters and attorneys are taking advantage of loopholes in insurance policies and Florida laws.  Here is an info-graphic from the FAIA to explain more (Click Here). Even though we have not seen any major hurricanes in a few years, the companies are paying more in property claims than ever before (although most of the payments are going to attorney fees) Many Florida Property Insurance Companies have either stopped accepting new policies, non-renewed a large portion of their customer base, or put major limitations on underwriting guidelines to stop growth. Citizens (State Insurance company of “last resort”) is growing faster than any other property insurance company in Florida. Insurance Policies are not intended to be maintenance policies. Yet, some consumers are using contractors, public adjusters and attorneys to get a free new roof when the roof has aged and needs replacement.  I get it.  Roofs are expensive…especially at today’s inflation rates. However, this is like having your auto mechanic file a claim to your auto insurance companies when they wear out. But I digress. What is a Reciprocal Insurance Exchange? A Reciprocal Insurance Exchange has 3 parts: The Advantages of a Reciprocal Insurance Exchange Subscriber Savings Accounts – Once the company makes an underwriting profit (spends less than it makes), the subscribers will begin to share in the profits.  Although they won’t get a check each year, they will receive any funds from the account when they cancel their policy (sold property, went to another company, etc.). More Transparency – As a Subscriber, you will be notified of the financials of the Exchange. No, you won’t know what neighbors filed a claim, but you will know the financial health of the company. Mindset of the Policyholder – Since the policyholder is an owner, it is believed it will decrease unethical decisions by policyholders.  Better maintenance decisions on their home.  Less likely to file frivolous claims. Less likely to be fooled by shady contractors that knock on their doors. They know bad decisions affect their premiums and chances of getting an underwriting profit. At least, that is the hope. The Disadvantages of a Reciprocal Insurance Exchange Subscriber Surplus Contributions are non-refundable. In the beginning, the company will be charging 10% of the annual premium as a Subscriber Fee. If you cancel your policy midterm, you will get a smaller refund that you would get with most admitted insurance companies. Although Tower Hill Insurance Exchange is not one of these, some Reciprocal companies can offer assessable policies. This means they can charge additional premiums if operating expenses were higher than expected. Fortunately, Tower Hill Insurance Exchange policies are non-assessable. If you have any additional questions about the Tower Hill Insurance Exchange, visit the THIE page.

Know Your Options Before You Get Behind the Wheel of a Rental Car

Whether you’re hitting the road for a weekend getaway or renting a car from the airport, knowing all your insurance options before you get to the car rental counter is wise. So what are the basics? Here is an overview to help you the next time you rent a car. Understand what your car rental company offers Should you take the insurance that your car rental company offers you at the checkout counter? It depends on your current personal insurance situation. If you have auto insurance already, you might have some added options beyond the rental company coverage. Either way, here are a few basics on what most rental companies will offer. Loss damage waiver A loss damage waiver (LDW), also known as a collision damage waiver (CDW), waives financial responsibility if your rental car is damaged or stolen. This type of policy also offers coverage for “loss of use” charges if the rental is being fixed or towed. Liability insurance By law, car rental companies must provide the state-required minimum liability insurance coverage. However, the Insurance Information Institute (III) says this plan often doesn’t offer enough coverage. Liability coverage won’t help protect you if the rental is lost, stolen or damaged. It will only help protect you in the event of an accident. Personal accident insurance Personal accident insurance will cover injuries to you and your passengers in the event of an accident. Personal effects coverage Personal effects coverage offers insurance coverage for any items stolen from a rental car. If you don’t have homeowners or renters insurance, this is something you should consider. How your credit card may help If you’re considering relying on the coverages that your credit card company may offer, bear in mind that deductibles and restrictions are probably in place. Every credit card company has different coverage options, so it’s best to call them to investigate the fine print. Primary coverage or first to respond Some credit card companies offer primary coverage, which means they respond to the claim first. There are limitations and exclusions that you’ll need to clarify with your credit card company. Some coverage excludes certain vehicles (trucks, luxury cars, moving vans) or price valuations (nothing over $50,000). Secondary coverage or second to respond Most credit card companies offer secondary coverage, which means you have to have a primary insurance policy in place. If you don’t already have personal auto insurance, then you’ll be without coverage. Secondary coverage is like an excess policy and may also help with out-of-pocket expenses. Consider coverage you may already have If you own a car and have full coverage, then that coverage will most likely carry over to cover your rental car. If you have a claim involving your rental car, your auto insurance should cover the rental car (with the same exclusions and limits). The claim will appear on your personal auto insurance history, though, which could affect your rates. Out-of-pocket at the counter Even if you have comprehensive and collision auto insurance, you’ll likely have to pay car rental damages upfront and recoup those costs by filing a claim with your insurance company. In this case, you may be signing a credit card bill for hundreds or even thousands of dollars when you return the damaged car, not knowing if you’ll get that money back. For this reason, most car rental companies won’t accept debit cards or credit cards with small limits. Your insurance professional can help No matter what your travel plans, before you rent a car, do your research before signing on the dotted line. Review your personal auto policy and speak with your insurance professional about which options are ideal for your situation.

Should I Sell It, Or Insure It?

Auto Insurance – Is it worth insuring a rarely used vehicle? The quick answer is “Yes”.  If you have a vehicle that is registered and tagged for road use, it has to be insured or you may pay hefty fines by the state you live in.  We have a lot of customers that have said that they don’t want to pay the high cost of auto insurance for a vehicle that doesn’t get used, so we have come up with a few suggestions on how to handle this scenario. Adjust the insurance coverage on the vehicle We are insurance agents, so we would never tell you to reduce coverage, but you are the boss of your insurance policy.  If you are not using it,  make a few changes to your coverage: Consider returning the tags (license plate) to the DMV If you are not using a vehicle, you could always surrender the license plate to the DMV.  Insurance is linked to your license plate. If your auto insurance cancels, the insurance company must notify the Department of Motor Vehicles to let them know that the vehicle is uninsured.  If there is a license plate tagged to the vehicle the DMV will send you a fine for being uninsured.  However, if you have surrendered the plate, there would be no fines assessed.  Just be sure it isn’t a vehicle that is ever going to be used. Also, if it is not insured at all, even if it is stolen and used by a thief, you could be liable in the event of an accident or hit and run because you are the registered owner.  Also, anything can happen to the vehicle even when not in use. Theft, flooding, Just sell it If you aren’t using it, the Dave Ramsey ELP in me says “Why haven’t you sold it?”.  Even if it doesn’t run, you could probably pay off a lot of bills by selling it to a scrap yard. Or, maybe you should donate it to a nonprofit organization and write off the value on your taxes.  If it doesn’t run, it’s probably an eye soar on your property or taking up room in your garage.  If it has sentimental value, take a picture of it or keep the steering wheel as a keepsake. Vehicles need to be maintained even when not in use.  You need to still run them occasionally, and they still need an oil change.  Consider the cost of insurance and maintenance and compare it to the frequency of driving.  Is it cheaper to rent a truck or use ride sharing as needed?  If so, just sell it. Is it really that expensive to insure it? Sometimes it may just be all about perspective.  Through the years, I have heard my share of complaints from clients that say their insurance is too expensive. Once we re-quote the insurance, we may find that the current price is the best available.  Although it is always a good idea to get multiple quotes from an independent agent, if you have the best rate available, maybe it isn’t too expensive. Maybe, you just need to update your budget.  Some customers may change insurance to save less than $100 for the year, but that same customer may be paying over $50 per week at a coffee shop and over $200 per month for cable and internet. Dave Ramsey would probably suggest adjusting your budget.

Will the Insurance Company Pay for Replacing My Aging Roof?

Unfortunately, there would not be coverage from your insurance company unless they had proof that the damage was caused by a recent, direct, sudden, and accidental loss (e.g. hurricane damage, tornado, hail damage, tree falling on the roof due to heavy winds, etc.). Insurance policies are not intended to be maintenance policies. You wouldn’t be able to get coverage from your auto company if your car overheated because you didn’t change your oil or add radiator fluid. Similarly, you wouldn’t be able to get a new roof from your homeowner insurance company because you haven’t replaced your aging, curling, and lifted shingles on your roof which are starting to cause water spots in your ceiling. There is currently a scam that some roofing contractors are doing where they advertise, or even go door to door, saying they can get you a new roof at a very low price or even for free. Be wary if a roofing company requires you to sign a form (sometimes called an “Assignment of Benefits form”) that states that they will manage any claims with your insurance company. These companies know that you may not be able to afford to replace a new roof, so they try to file a claim on your behalf hoping that the insurance company will. Oftentimes, they will even do the repair work before submitting the claim to the company, so the company adjuster would not be able to inspect the damage. The companies are catching on to it, though, by using their own contractors and roofers because it has been driving up the cost of insurance at a rapid rate. Also, they have changed the wording in their policy that states that the company will only cover up to 1% of the value of the home coverage amount or $1000 for “emergency repairs” (which is usually only enough for tarping) until the damage has been inspected by a company representative. Some insurance companies are now even filing endorsements to cover roofs at “actual cash value” rather than replacement cost. This means that if you have a 15-year-old shingle roof and the life expectancy of the shingle is 30 years, the company will only pay for half of the repair, minus the deductible. The fight between insurance companies and questionable roofing contractors is causing consumers to pay more for less coverage.

Can I Extend My Uninsured Motorist To My Recreational Vehicles?

If you are purchasing a motorcycle or ATV insurance policy, you may notice that bodily injury and property damage are very inexpensive. However, medical payment coverage and uninsured motorist coverage are quite “pricey”. The reason is that bodily injury and property damage liability covers damage to others and other people’s property. The uninsured motorist and medical payments coverage is coverage for your own injuries. Although these small vehicles cannot cause much damage, the injury to the driver can be severe. So, what if you took the uninsured motorist coverage on your auto policy and added stacked coverage. Would the coverage extend to the recreational vehicle? It probably would, but the auto company is not intending for their coverage to extend to vehicles that are unlisted on the policy. Rates are based on the risk, but companies only know the risks that are on the policy application. By taking your auto coverage and stacking the limits in order to cover the uninsured motorist coverage for recreational vehicles, the company is not getting the additional premium for the increased risk. Although this is not fraudulent, it is considered “mischievous” because it is trying to work around the system in order to get additional coverage without the added cost. Although not considered fraud, it is similar to fraud because the end result is higher premiums for all.

Can I Get Sinkhole Coverage in Florida?

Good question and the answer is maybe, but probably not. Unfortunately, in the mid-2000s, the insurance industry had a crisis on their hands that caused some companies to leave Florida, or worse, became insolvent. There were some attorneys and public adjusters that started to “test” the language of the insurance policy which stated that a sinkhole was the “settlement and cracking that may be caused by a sinkhole”. Most homes in Florida have cracking or settlement damage. Our homes are usually built on clay and/or sand, but it may be a sinkhole. Therefore, when the economy crashed, some attorneys would actually tell clients they could get them out of their debt by filing a sinkhole with their companies. Billboards in Pasco and Hernando started to pop up stating “Are you thinking about filing for Bankruptcy? Call us.” Another one stated “Do you have settlement or cracking? Could be a sinkhole. Call us”. Once a sinkhole claim was filed, it became a regular practice that the insurance company would be required to send out a geoengineering firm to drill holes into the ground around the property checking for pockets and costing the companies $15,000 or more per claim. Not every claim was covered, but because attorneys and public adjusters would get a percentage of a “claim pay-out”, they would make money even if their client did not. To stop the bleeding, most companies no longer covered “sinkholes”; they would only cover “catastrophic ground collapse” which is a visible sign of a sinkhole that makes the home condemned and unlivable. Other companies switched to a 10% sinkhole deductible, in hopes that the client would not file a fraudulent sinkhole claim knowing that they would have to pay the $20,000 engineering cost to investigate the property. Today, some companies will offer sinkhole coverage with a 10% deductible, but they will require a sinkhole inspection in order to add this coverage. It costs the consumer about $150 and the inspector basically just counts the number of cracks in the home and on the driveway and sidewalk. Over 80% of the inspections do not pass, so we usually don’t even put our customers through this option. There are a few companies, like Progressive and Cabrillo, that will offer the sinkhole coverage (with 10% deductible) on new construction without the inspection, but overall the industry has not completely recovered. As a side note, the industry has a new crisis on its hands and it’s called “Assignment of Benefits”. Unfortunately, when the well runs dry in one area, there are certain people that find another loophole to try and scam money from insurance companies. Yesterday’s sinkhole story is today’s roof and water damage.

Should I Tell My Agent If I Get a New Roof?

Absolutely! In Florida, one of the most important features for insurance rating is the age of the roof. In fact, some companies will not even rate a roof older than 12 to 15 years old, so if you have an older roof, you may have fewer options. It makes sense that a new roof will do better in rain, hail, or hurricanes than a 15-year-old roof, so insurance companies really compete on pricing on new roofs. What should I send to my agent? You should send a completed work order or receipt and photos. (No, we don’t recommend getting on your roof to take photos…ground level photos should be sufficient). Maybe even include any roof warranties or something that shows the quality of the shingles used (e.g. architectural shingles with a 120 mph rating). Also, for an even better discount, we would certainly suggest a wind mitigation inspection. They usually cost about $100-$150, however, your roofer may be able to complete one for you. We can send those to your current insurance company to see if they will give a price reduction. We can also reshop your home insurance with other companies for a new policy. See below for a list of Wind Inspectors who customers have used in the past. What if I just had the home re-shingled, but the decking and the roof to wall connections were not upgraded to the new codes? The insurance companies will still want the proof and will likely apply a new roof discount to your home. However, we would not suggest you get a new wind mitigation inspection, since the wind mitigation inspection looks at updated roofing code upgrades.

What If My Roof Is Older? Is It Harder To Insure?

Unfortunately, due to a lot of insurance fraud, companies are very strict on roof age and condition, and it is getting very difficult to insure older roofs no matter what condition they are in. People with shingle roofs over 12 years old may find it difficult to shop insurance because options are getting limited. A few companies will still consider insuring an older roof if the client can get a roof inspection (usually costs around $100) that states the roof has at least 5 years remaining life. However, the list of companies that will accept a roof inspection is getting smaller, so it may be best to stay with your current insurance company until the roof has been replaced. We have seen a few cases where a client has moved to another insurance company due to a better price only to be canceled by the new insurance company due to the “condition of the roof”. So now they may be stuck with a higher price because the previous company will likely not reinstate unless a new application is completed, and, due to “adverse selection”, they may have changed their roof requirements and the home is no longer eligible. What about older metal roofs or clay tiles roofs? Most companies prefer a metal or clay roof and allow them to be older. At the moment, a steel roof is probably your best option. They are accepted up to 25 years or more with most companies. Like shingle roofs, older clay roofs are starting to get harder to insure with a few insurance companies and may become the next “trend”. This is because older clay roofs are getting hard to match and HOA’s have sometimes required a homeowner to replace a whole clay tile roof, even though only a few tiles were damaged after a storm. This means the insurance companies are paying more for the repairs than they intend, so pricing and age qualifications on clay tile roofs may change over time if this trend continues.

Can I Extend Liability on My Home Insurance to My Vacant Land?

Actually, liability is extended to vacant property automatically. However, and this is very important, what we consider vacant land is probably not what the insurance industry understands as “vacant”. According to the ISO (Insurance Service Office), the advisory organization that provides standardization in the insurance industry, vacant land is considered to be a property with no man-made structures on the premises. So even if your vacant property has a pole barns, shed fence, wall, telephone pole, or a paved road, it is no longer considered “vacant land” according to the insurance definition and liability would not automatically extend. Therefore, it is best to cover any other land owned with a premises liability policy. This is a policy that gives liability coverage for a defined piece of land (whether it is a street address, parcel ID, or even latitude/longitude coordinates). These rates are usually based on acreage and can include multiple properties on one policy. The good news is that they are usually pretty inexpensive (minimum premiums starting at $150.00 per year).