As a general rule of thumb, should a second home of lesser value cost more than a primary residence? The wife and I are looking into a fixer upper on a lake 90 miles away, and the insurance rates I'm being quoted are higher than I expected.

Will my primary home insurance cover liability, etc, so that I just need the structure insured? Or, would I be better off just insuring the structure, and then getting an umbrella policy just in case?

This is a totally new world to me, I only know the financing side. TIA

We purchased a lake home and faced the same dilemma. What I found out was that the fire protection or "town class" rating at the lake was much worse that in the city where our primary home is located. This is what drove the increase in premiums.

Most carriers I have talked to require you to insure your primary home with them as well as the lake home. I bumped up the liability limits on both properties when we bought the lake home, and later bought an umbrella policy. The cost to add the liability protection on the second home was pretty low, relatively speaking.

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We purchased a lake home and faced the same dilemma. What I found out was that the fire protection or "town class" rating at the lake was much worse that in the city where our primary home is located. This is what drove the increase in premiums.

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That is pretty spot on. Most "second" homes are usually out in the country and normally in a 9 or 10 protection class. This means you are more than 1000 feet from a fire hydrant and/or more than 5 driving miles from a 24hr manned fire station. Many primary carriers will not write insurance these areas so you have few options. In addition, a second home is occupied less often and therefore more susceptible to vandalism, prolonged water leak..etc. All that combined will generally mean a higher rate charged per $1,000 of insured value.

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We purchased a lake home and faced the same dilemma. What I found out was that the fire protection or "town class" rating at the lake was much worse that in the city where our primary home is located. This is what drove the increase in premiums.

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That is pretty spot on. Most "second" homes are usually out in the country and normally in a 9 or 10 protection class. This means you are more than 1000 feet from a fire hydrant and/or more than 5 driving miles from a 24hr manned fire station. Many primary carriers will not write insurance these areas so you have few options. In addition, a second home is occupied less often and therefore more susceptible to vandalism, prolonged water leak..etc. All that combined will generally mean a higher rate charged per $1,000 of insured value.

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Will my primary home insurance cover liability, etc, so that I just need the structure insured? Or, would I be better off just insuring the structure, and then getting an umbrella policy just in case?

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Depends on the carrier but often your can extend your primary residence liability to vacation, home, rental home vacancy land. I highly recommend this if the insurance for the second home does not automatically include liability.

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Also keep in mind being a second home (and not primary) there is more exposure for losses for things like theft and claims that end up being more costly if you are not there to report it right away or take action to prevent further loss. Depending on the carrier you may be able to extend your liability to cover the second home and I would definitely suggest you look into getting an umbrella policy as DJA did. They are very cheap for the amount of coverage you can get.

In my opinion the two biggest exposures that most people do not have coverage for are an umbrella policy to protect against a catastrophic liability claim that exceeds their home or auto liability limits and long term care insurance that can eat away at someone's assets very quickly.