A Guide to Unoccupied & Vacant Home Insurance

Chances are, you’ll have a vacant home on your hands at some point. Even if you’re perfectly happy with your home right now, situations change, the unexpected happens, and there are plenty of twists and turns in life. There are plenty of reasons for owning a vacant home, which we’ll get into momentarily, but do you know the risks associated with an empty house or apartment?

Vacant home insurance is a policy you should highly consider if you find yourself with a home void of furniture and people. Think no possessions or people mean there’s a less likely chance anything can happen? Unfortunately, the opposite is true. Let’s explore the world of vacant home insurance and keep you, your future, and your empty home safe.

Can You Get Insurance for an Unoccupied House?

Absolutely. In fact, it’s highly recommended. While it’s not legally required, it’s one of those things you regret not doing when something bad happens. Just because you have a home with nothing in it doesn’t mean it’s worth nothing to you.

Many make the mistake of believing their homeowners insurance covers vacant property as well, especially if they used to live in the home that is now vacant. But, depending on the insurance company, 30 to 60 days after you vacate your home, your insurance may no longer cover it. Most policies exclude vandalism and glass breakage claims after the grace period, which includes any ensuing loss caused by vandalism. If intruders break in and burn down you house, it won’t be covered.

If your home is proven to be unoccupied or vacant, your policy may be canceled or nonrenewed, leaving your home open to a variety of financial disasters. Because there are no inhabitants to smell smoke, close storm windows before severe weather, or call the police when a robber breaks in, the risks to insure a vacant home are higher for insurance companies. This is why you’ll find limited coverage with reasonable premiums or good coverage with inflated premiums.

Reasons for Needing Unoccupied Homeowners Insurance

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As mentioned, there are a variety of reasons for a home being vacant. But what really qualifies as vacant? As defined by the courts, a home is vacant if there is not enough furniture for someone to reasonably and comfortably live there. A home with the necessary kitchen appliances, a small dining set, a twin sized bed and a recliner or two might be able to sneak under the vacancy radar.

However, a home with furniture but no people is still considered unoccupied, which can also void your insurance. Don’t try to outsmart your insurance company but be prepared to know your rights. Homeowners have had to take their chances in court when trying to fight vacancy statuses in the past.

So why might someone leave their home for a long period of time? Here are just some of the more common reasons and what to do if you find yourself in one.

Divided Time

Do you own a vacation home? If you’re fortunate enough to have homes in two very unique locations, you may split your time up throughout the year between them, taking advantage of better weather. Switching back and forth from a homeowners policy to a vacant home policy would be time consuming and exhausting. Ask your insurance broker about special seasonal and vacation home coverage. You may also qualify for a packaged deal that will cover both homes throughout the year.

Renovations

If you’re completing extensive renovations, or more than just a few coats of paint, you may need to temporarily vacate your residence. Before you do so, speak with your insurance company. You may need additional coverage for a construction site, as they can attract thieves. The work itself puts your home at risk for damage as well so be prepared to add on additional coverage.

Renting/Selling  

If you’ve purchased a new home and are in limbo while you either rent out or sell your original home, speak to your insurance broker. You may be able to simply add on an endorsement to your current policy or you may have to purchase an entire new policy for the vacant house until someone moves in.

Medical Treatment

Whether you’re recovering from an accident, surgery, or serious illness, prolonged time in a hospital or rehab center could leave your home unoccupied if you’re gone past your policy’s window. If this happens, give a family member power of attorney and ask them to check with your insurance company to see what needs to be done to keep your house protected until you’re able to return.

Traveling

It may be a small world but when you’re traveling across it for several weeks or even months at a time, your home may reach vacant status. An endorsement will be your most likely step to protect your home while you check off locations from your bucket list.

Apartments

Do you need vacancy insurance for an apartment? It depends. If you rent, your renters insurance (which you do have, right?) will still protect your belongings, for as long as you’re gone, as long as the policy is active. While you should inform your landlord of your absence, you do not have to inform your insurance agency. But if you own the apartment, you do need a vacancy policy. Speak to your broker about the best way to protect your apartment. Only owning the apartment versus owning all the apartments in a small building will have different options.

Types of Vacant Home Insurance Coverages

Unoccupied and Vacant Home Insurance is different from that available to homeowners who occupy their homes. These are some of the coverages typically associated with Vacant Home Insurance:

Named Peril Coverage

This differs from traditional coverage on vacant and unoccupied homes because vandalism is typically excluded leaving the named perils to include:

  • Fire
  • Lightning
  • Explosion
  • Windstorms
  • Hail Damage

Perils that aren’t included or named will need specific add-on coverage.

Vandalism and Malicious Mischief Coverage

While typically a part of homeowner’s insurance, for owner-occupied homes, this type of coverage is generally excluded on unoccupied homes, which often make attractive targets for vandals.

Agreed Loss Settlement

In the event that the destruction to the home equates to a total loss, this is the agreed upon amount, minus deductibles, you will receive from the insurance provider.

Actual Cash Value

If the home is damaged by a covered event, the actual cash value will cover the cost to repair or replace the property after determining a depreciation value that considers the age of the home and its condition.

Liability Coverage

If you are found legally responsible for injuries or property damage that took place on your property, liability coverage helps provide you with legal representation and helps to cover the costs of judgments against you.

The key, though, is to consult with your insurance agent about unoccupied and vacant home insurance to learn what coverage is available to you and which policies are the best options for your home and your circumstances.