Whether a home isn’t being lived in because it’s on the market to be sold, is between renters or the owner has temporarily moved out, it’s important that it’s insured properly. A regular homeowners insurance policy or a landlord policy may not cover a home if it is vacant, depending on the circumstances.
Insurance companies typically treat an unoccupied home differently from a vacant home. A home may be considered unoccupied if the owner or renter has gone on an extended trip but left all their furniture and belongings in place. A home is considered vacant when it has been emptied of all belongings and personal property.
Vacant homes are a larger liability for insurers and for the owners. When a property is empty, it’s more tempting for people to vandalize it or break in. If the vandalism causes water damage, it may not be found for a long time and cause further issues in the property. Because of the increased risk, insurers have policies specifically for vacant homes that provide coverage for these kinds of incidents.
Since vacant homes have an increased liability, vacant home insurance is more expensive than homeowners insurance. The higher cost of insuring a vacant home may make it more tempting for the owner of the property to avoid telling their insurance company or adjusting their policy, but keeping your insurance company informed is important.
Major problems may arise when a property owner tries to file a claim on a vacant property without having the proper coverage. Insurance companies may deny the claim, drop the owner’s coverage or consider the claim fraudulent. Homeowners insurance policies frequently exclude coverage if a claim is made at a property that is found to be vacant. Additionally, a new insurance carrier may charge the property owner more if they were dropped from their previous coverage.
There is some wiggle room, however. Most insurance companies allow homeowners to have a regular policy on the property until it has been vacant for a specific amount of time, which could range anywhere from 30 days to 90 days depending on the carrier.
Unsure if vacant home insurance is necessary? The best place to start is by speaking with a knowledgeable insurance representative so they know the details for your specific circumstances. They can provide specific details about the types of coverage they offer, the terms and requirements for coverage, and recommendations on the right amount of coverage.