Lake Tahoe - Truckee, CA Real Estate for Sale

Property Insurance Tips for your Tahoe Second Home

Property Insurance Tips for your Tahoe Second Home

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Property Insurance Tips for Tahoe Second Home Owners

Depending on how you will use your Tahoe second home that usage will impact the type of insurance coverage you will need. 

Here are some property insurance tips for Tahoe second home owners.  The first group of tips on getting your initial policy. 

The second group of Tahoe second home owner insurance tip are on keeping your policy up-to-date.

If you vacation rent (short term rentals less than 30 days, for insurance companies this may be as much as less than one (1) year, so ask what applies), you should have an insurance policy that covers renters (landlord) and has the additional liability insurance coverage you will need to protect yourself and your Tahoe home.

There are a number of Tahoe real estate Buyer Tips when it comes to getting homeowner insurance in the greater North Lake Tahoe – Truckee Area.

Here are some tips when it comes to getting that initial policy and suggestions that may help when contacting insurance brokers to get a quote and explore coverage options.

This may include the following:

  • Owner Information Details:  Get all of your contact information and details organized and ready to share with your insurance broker, and/or multiple insurance brokers/agents.
    • Insurance is about you and the property so have details on your property available. 
    • Questions that may be asked about the property:
      • Age of the roof?  If the age of the roof is different than the year built, do you have written evidence showing when that roof was built?  Example:  Permit, and/or Invoices from Roofer 
      • Is there a hot tub, and if yes, does it have a locking cover, and/or locking fence around it?
      • Does the building have a fire suppression system?
      • Does the home have a main water shut-off valve?  Are there documents that identify that the property has these features?
      • Square footage of the building? 
      • Age of the building? 
      • Are there other buildings on the property – detached garage, detached garage with kitchen and living quarters, sheds, etc.
      • Have there been any insurance claims on the property in the past five (5) years? 
        • If yes, what was the claim, how much was the claim, and are there documents showing that the work was done/item repaired?
    • Questions about you:
      • All names of all insured parties to be named on the policy.  
      • Some insurance carriers may limit the number of names, so organize them in a priority so that if all names can’t be included, you’ll know who should be named.
      • Each insured name should have their birth date info, email contact, phone number, and mailing addresses if different that the initial named person. 
      • Have you, or any of the insured individuals made any insurance claims in the past five (5) years?
        • If yes, what was the claim, and how much was the claim.  Yes, your past insurance history can impact your ability to get new coverage on a new property.
  • Short Term or Long Term Renters Coverage: If you are going to need a landlord (renters) policy to do short, or long term rentals, make sure your insurance brokers knows that information immediately. 
    • Many carriers are no longer writing new policies in our area and it may take your broker more time to find, and/or process your application. 
      • Each carrier has their own rules – planning ahead is critical to meeting your purchase contract deadlines. 
      • If you are getting a loan, make sure that getting a landlord policy will not cause problems with the underwriter if you are making the purchase as second home, and not as an investment property. 
      • Your insurance broker will most likely need to start the policy application over if your coverage usage is different landlord verses home owner.  This means a delay in getting your insurance policy in place.
  • Property Management Insurance Requirements: If you will be doing short term, or long term rentals and are using a professional property management company, they will ask you to add them onto your insurance policy as a “named insured” and they may have insurance coverage limits you will need to meet
    • You will need the property management company to provide you with how their name and contact information should appear on the policy.  
    • Avoid application delays – have the property management company information ready for your insurance broker.
  • Lender Information.  If you will be getting a loan as part of your purchase, you will need to provide your insurance broker with their name, contact information (mailing address), loan number, and mortgagee clause (exact language that the lender will require on the insurance policy).
    • Avoid application delays – have all of your lender information ready to go.  The longer it takes to get this critical information to your insurance broker, the longer the insurance broker will wait to submit your application.
    • Your insurance broker cannot process your application without it. 
    • Once an application has been submitted, it is not a simple process to make a change, and last minute changes may result in having to start the entire application process from the beginning, so accuracy counts.
    • Getting the lender information correct at the initial insurance information intake will save you time and frustration later  if you have to get this information updated after the policy has been issued.

Other Buyer Tips for Getting Homeowners Insurance in the Tahoe Buying Process:

  • Apply immediately for home owner insurance as soon as you have an accepted offer. 
    • Starting the process of getting homeowner insurance should start on the day you get your acceptance!  It may take several weeks, or longer to get your policies issued.  This is a Buyer critical task!
  • Don’t assume your current, local insurance broker will be able to help you in our area. 
    • You need to get a firm commitment, quote, and or application submitted with them right away.
    • Finding out at the last minute before your Buyer contingencies are due to be removed that your local insurance broker was wrong, and they can’t get you a policy will cause delays. 
    • Local insurance brokers should be able to help you, but they will need time to make and process your application.  Give yourself options and figure out your insurance plan at the beginning of the process. 
    • Don’t know who to talk to?  Ask your local Tahoe Real Estate Agent for insurance broker recommendations.
  • California Fair Plan
    • If you end up having to use the California Fair Plan as part of your insurance coverage plan, be advised that the age of the roof will determine your pay out option in the event of a claim. 
    • The California Fair Plan will only give you the “repair/replace” pay-out option if the age of the roof is less than twenty-five (25) years old. 
    • Each insurance carrier has their own rules, or features which often determine “repair/replace” versus “actual cash” payouts, so ask what those features are:  Age of roof, plumbing, over-all structure, or something else.  For the California Fair Plan, it is the age of the roof.
    • Lender Requirements: If you are getting a loan your lender will want you to have “repair/replace” coverage options rather than “actual cost” coverage.   If your lender will take a policy with “actual cost”, you need to get that in writing upfront from them so you know what properties will qualify for this coverage.
      • Buyer Option:  Perhaps the property you are purchasing needs a new roof and your lender will agree to give you a year to get a new roof which will allow you to get an insurance policy with a “repair/replace” payout option.  When in doubt, ask, there maybe solutions and unexplored options.
  • Be patient, and follow-up.  Insurance brokers/agents are overwhelmed with inquires.  Getting home owner insurance in the greater North Lake Tahoe-Truckee area can be time consuming to find an insurance broker that is writing new policies in our area. Be prepared to find out you have limited options. 
    • Getting the California Fair Plan and a Difference in Conditions (DIC) also sometimes referred to as a “Wrap-Around” policy to cover the perils that the California Fair Plan policy (typically referred to as the “fire” policy) does not cover may be your only option.
  • Other Insurance Options may, or may not be available at the time you apply for insurance in our high fire zone so be prepared for finding insurance to take more of your time than what you may have experience in the past and plan ahead.  The days of getting in place last minute coverage is not common in our area. 

Here is a list of Tahoe second home insurance questions to ask yourself. If you answer yes, to any of them, it’s time to call your insurance agent and have a policy review.

  1. Usage:  Has the type of use of your Tahoe second home changed?  The home is now having occasional vacation renters in it, or you’ve stopped doing vacation rentals?  Your policy needs to be updated to reflect your current usage.
  2. Occupancy:  This Tahoe home will be a second home with limited occupancy, or you’re changing from a second home to a primary residence with full-time occupancy, you need to make an update.
  3. Update or Major Renovations: A major update, or renovation to the home has been completed – new kitchen, new bathrooms, flooring, decks, etc.  Will the current insured amount cover the increase in value, or the replacement of these new features and upgrades?
  4. Wood Shake Shingle Roof:  Have you replaced a wood shake shingle roof with a newer metal, or composite roof material?  If yes, did you call your insurance agent and let them know you’ve done this work? In the Tahoe area most insurance policies are less expensive for a non-wood shake shingle roof.
  5. Ownership Change: Has the ownership changed, or has the loan been paid off?  Life happens and with those changes mean insurance policies need to be updated to reflect current home ownership, and who may need to be paid in the event of total destruction.
  6. Cost to Rebuild:  Has the cost to rebuild increased in the greater North Lake Tahoe – Truckee, California area?  
    1. Annual Policy Review If it has been more than two (2) years since you last reviewed your Tahoe second home insurance policy coverage limits, it’s probably time to make sure you have the right amount of coverage.   
    2. Inflation and the increased cost to build in the greater Tahoe area has increased significantly over the past few years.  Your Tahoe property may need to have its coverage limits increased so that it is properly covered in the event of a loss. 
    3. Maintaining property coverage is important as many insurance policies contain a provision that requires the property owner to maintain at least 80% of rebuild value (depending on your policy that amount could be 90%, or even 100%).  This is often referred to as the 80% Rule.  You can Google it and learn more.
    4. Rebuild value/cost is not the same as market value, or what you get if you sell the property.  It is about the cost to rebuild the structure(s) today.  The insured value does not insure for the cost of the land, so be sure to separate the cost per square foot to rebuild your structure.
  7. Past Insurance Claims:  If you’ve had a past insurance claim on the property, remember it stays with you, the insured, and the property for five (5) years.
  8. Ask your Insurance Broker/Agent:  If you have insurance questions on how much you are insured for, and how much coverage you should have based on the current cost to build, now is the time to call your insurance broker/agent!

Getting insurance in California and in the greater North Lake Tahoe – Truckee area can be a challenge.  You’ll be provided with a number of disclosures and advisories about getting insurance in our area.  They are very helpful and worth the time to review.

The tips in this article are some suggestions, and there may be other issues, or items that you may need to address to get insurance on the property you want to purchase.  

The insurance market continues to change, and working with a professional insurance broker/agent is the best course of action for any Tahoe real estate buyer!

Making sure you have the right type of property insurance for your Tahoe second home is an important part of home ownership.  A quick review can make sure you’re covered.

Thinking about making Lake Tahoe, California your second home? Check out the homes that are for sale here:

Want to see what condos are for sale in Lake Tahoe? Here are the current listings:

Search the Truckee – North Lake Tahoe area by map here: homes, condos, lots!

Here are some popular North Lake Tahoe Communities:

How about making Truckee your second home? Check out what is for sale here:

Here are some popular Truckee area neighborhood options:

For all of your Tahoe real estate needs –

For all of your Tahoe real estate needs –

Laura A. Allen | 530.414.1260  | Laura@TahoeLaura.com
BROKER ASSOCIATE | North Lake Tahoe – Truckee Real Estate Professional, Advisor, and Agent
CalRE# 01473598
Coldwell Banker | Tahoe City – Truckee, CA

All information is deemed reliable, but is subject to change, and/or correction without notice.

Property Insurance Tips for Tahoe Second Home Owners

 

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