Owning a seasonal home, lake house, or cottage in Northern Michigan is one of the best ways to enjoy everything the region offers. But insuring a second home is very different from insuring a primary residence. If the policy is written incorrectly or missing key coverages, you could face expensive gaps during a claim.
This guide breaks down what Michigan homeowners need to know about insuring a second home or seasonal property the right way.
Why You Must Properly Classify Your Seasonal Home
Insurance companies rate seasonal, part-time, or secondary homes differently than full-time primary residences. If your home is listed incorrectly as your primary:
- Claims could be delayed or denied
- Premiums may be underpriced, causing issues at renewal
- Certain coverages may not apply because the home is unoccupied for long periods
Common classifications for Northern Michigan properties include:
- Secondary home (used regularly but not your main residence)
- Seasonal home (used only part of the year)
- Rental or short-term rental (if you list on Airbnb/VRBO)
Always make sure the classification accurately reflects how and when you use the property. It protects you and avoids any problems if you ever need to file a claim.
Replacement Cost vs. Market Value
This is one of the biggest misunderstandings with second home insurance.
Your insurance coverage should be based on replacement cost—NOT market value.
Market value is influenced by:
- Location
- Land value
- Waterfront access
- Demand for Northern Michigan real estate
None of those factors determine how much it costs to rebuild a home.
Replacement cost considers:
- Square footage
- Year built
- Construction materials
- Labor costs
- Roof, electrical, plumbing, and HVAC systems
Even if your cabin or cottage is older, rebuilding it today may cost far more than what the real estate market says it’s worth.
Essential Coverage Areas for Seasonal Homes
Here are the main insurance coverages every Northern Michigan second home should have:
Dwelling Coverage (Replacement Cost)
Covers the cost to repair or rebuild your home after a covered loss.
Other Structures
Covers detached garages, sheds, docks, boathouses, and similar structures.
Personal Property Coverage
Protects belongings stored at the property—furniture, electronics, tools, and more.
Loss of Use / Additional Living Expenses
Helps pay for temporary housing if you cannot use the home after a covered loss.
Liability Protection: Why $500K or $1M Makes Sense
Owning multiple properties increases your liability exposure. With more guests, more foot traffic, and more chances for accidents, choosing higher liability limits is smart.
Many Northern Michigan homeowners choose:
- $500,000 liability
- $1,000,000 liability (recommended for larger or waterfront homes)
This protects you if someone is injured on your property or if you accidentally cause damage to another property.
Important Optional Coverages to Consider
Secondary and seasonal homes in Michigan often need extra protection beyond basic home insurance.
Ordinance or Law Coverage
Pays for additional costs required to rebuild the home to current building codes—especially important for older cottages and cabins.
Water Backup Coverage
Covers damage from backed-up drains or failed sump pumps. This is a common claim in seasonal homes that sit empty for weeks at a time.
Service Line Coverage
Protects underground pipes and utility lines on your property. Repairs can range from $2,000 to $10,000+ and are not covered under a standard policy.
Short-Term Rental Considerations (Airbnb / VRBO)
If you rent out your second home—even occasionally—you may need:
- A specific home-sharing endorsement
- A landlord/short-term rental policy
- Higher liability limits
- Business income coverage if the rental generates income
Not telling your insurer about short-term rentals is one of the biggest mistakes homeowners make.
Should You Add an Umbrella Policy?
If you own multiple properties or short-term rentals, an umbrella policy is often worth it.
Umbrella policies provide:
- $1M–$5M in additional liability coverage
- Low premiums (typically $300–$500 per year depending on number of homes and autos)
- Protection across all your homes, vehicles, and other assets
For many Northern Michigan homeowners, this is one of the best value coverages available.
Final Thoughts
Insuring a second home in Northern Michigan is not one-size-fits-all. Proper classification, the right dwelling limits, strong liability protection, and key optional coverages can make a major difference when you need them most.
If you want help reviewing your current policy or building coverage for a new home, I’m here to help.
Need Help Reviewing Your Second Home Insurance?
If you’d like a professional review or want to compare your options, I can help you find the right coverage for your seasonal or secondary home.
Contact us today for a personalized quote or coverage review.
