Owners of a higher-end second home typically want to insure it with a policy similar to what they have on their full-time residence, which includes a comprehensive list of causes of loss and replacement cost settlement. Your agent may refer to this kind of coverage as “special form” or “DP-3.”
But many vacation homes are older. Some may well lack insulation, a furnace or central air, possibly even electricity. Even the porch may sag a little. Homes that are well-loved, but not in pristine condition, likely do not qualify for comprehensive coverage. Instead, they need something more basic. Your agent may refer to this kind of coverage as “basic form,” “DP-1” or simply “fire insurance.”
American Modern offers both types of coverage.
Coverage provided – Any cause of loss is allowed except those specifically excluded in the policy documents. Losses are settled at the replacement cost, up to the policy limit. There is no depreciation deduction.
Coverage provided – The policy covers just those causes of loss listed by name in the policy documents (fire, lighting, wind, hail, explosion, and others). It covers the most common risks, but not everything. Losses are settled for the actual cash value (ACV), which takes depreciation into account. In many states we offer an upgrade to full repair cost coverage.
Spring is near. We have a few tips to help you inspect for winter damage and prepare for spring and summer storms.Keep reading