Insuring Your Vacant Home

Vacant home insurance is a type of insurance coverage for properties that are uninhabited or considered vacant. This type of insurance is important because typical homeowners insurance policies don't cover most claims on a vacant property due to vacancy clauses, which restrict or exclude coverage on properties that have been vacant for a certain period, usually 30 to 60 days. Vacant homes are more vulnerable to theft, vandalism, and other types of damage, which is why insurance companies consider them a higher risk and exclude them from standard policies. Vacant home insurance can be purchased as a separate policy or added to an existing homeowners insurance policy as an endorsement. It covers many of the same things as a standard policy, including damage from fire, wind, and hail, as well as optional coverage for acts of vandalism and liability.

Vacant vs unoccupied homes

When it comes to insurance, the terms "vacant" and "unoccupied" are not interchangeable. Understanding the difference between these two terms is crucial when it comes to property insurance coverage.

A vacant home is typically defined as being "completely empty", devoid of both people and personal property. It may also be described as being "substantially empty of personal property necessary to sustain normal occupancy". On the other hand, an unoccupied home still contains personal belongings and furniture, giving the impression that the owners could return at any moment. An unoccupied home will also usually still have its utilities connected.

Vacant homes are generally considered to be more vulnerable to issues such as vandalism, theft, and undetected damage. As such, insurance policies often contain vacancy exclusions, which restrict or exclude coverage on properties that have been vacant for a certain period, typically 30 to 60 days. This means that insurers may not cover claims for vandalism, building glass breakage, water damage, or theft if the home has been vacant for a specified period.

Unoccupied homes, on the other hand, are usually still covered by standard homeowners insurance policies. However, it is important to note that insurance companies usually require policyholders to inform them if their home will be unoccupied for an extended period, typically 30 to 60 consecutive days. Failure to do so may result in the insurer refusing to renew the policy. While unoccupied home insurance coverage is typically less expensive than vacant home coverage, it is still a good idea to inform your insurance provider if you plan to be away for an extended period.

When is vacant home insurance needed?

Vacant home insurance is needed when a property is uninhabited or considered vacant. This type of insurance is important because standard homeowners insurance policies don't cover most claims on vacant properties due to vacancy clauses, which restrict or exclude coverage on properties that have been vacant for a certain period, usually 30 to 60 days. Vacant homes are more vulnerable to theft, vandalism, and other damage, making them a greater insurance risk.

Vacant home insurance can be purchased as a separate policy or added to an existing homeowners insurance policy as an endorsement. It covers homes that have no belongings inside and are not being lived in. This type of insurance is ideal for properties that are up for sale, undergoing repairs or renovations, or otherwise unoccupied.

• You've moved into a new home but haven't sold your previous one.
• You own a rental property that's between renters.
• You're undergoing extensive renovations or repairs that make the home temporarily uninhabitable.
• You're hospitalized for an extended period for medical treatment.
• You own a vacation home that you only use for a few months each year.
• You're on active military duty or travelling for a prolonged period.

Vacant home insurance provides peace of mind and protects your finances in case of unexpected damage or loss while the property is unoccupied. It covers similar perils to a standard homeowners insurance policy, such as fire, explosion, lightning, wind, and hail. It's important to note that the coverage and duration of vacant home insurance vary depending on the insurance company and the policy chosen.

What does vacant home insurance cover?

Vacant home insurance is a policy designed specifically for a home that will be empty for an extended period. This type of insurance covers damage caused by vandalism, theft, and natural disasters like fires and floods, which can occur when a house is unoccupied. The purpose of vacant home insurance is to offer financial protection against the risks that come with leaving a home vacant for a prolonged period.

Vacant home insurance covers many of the same incidents as standard home insurance, including fire, explosion, lightning, windstorm, and hail damage. However, some perils may be excluded, most commonly theft and vandalism. Liability is also usually not included in the policy. It's important to note that vacant home insurance policies typically do not cover legal fees associated with removing squatters from the property.

Vacant home insurance can be purchased as an addendum to an existing homeowners policy, or as a separate policy from specialty insurance providers. This type of insurance is generally more expensive than standard home insurance due to the increased risks associated with unoccupied properties.

To reduce the risks associated with vacant homes, it's recommended to give the impression that the home is occupied. This can be done by installing security measures such as deadbolts, security systems, motion-sensor lights, and timers on lights. Maintaining the exterior of the home and enlisting the help of a friend or neighbour to keep an eye on the property can also help deter potential vandals or burglars.

How to get vacant home insurance

Vacant home insurance is a type of specialty insurance that covers properties that are uninhabited or considered vacant. This type of insurance is important because typical homeowners insurance policies don't cover most claims on vacant properties due to vacancy clauses, which restrict or exclude coverage on properties that have been vacant for a certain period, usually 30 to 60 days. Vacant homes are more vulnerable to theft, vandalism, and other types of damage, so insurance companies consider them a higher risk.

• Determine if you need vacant home insurance: The first step is to find out how long your home can be unoccupied before it's considered vacant by your insurance company. This information can be found in your home insurance policy or by contacting your insurance provider.
• Check with your current insurance provider: If you need vacant home insurance, start by asking your current insurance provider how they handle this type of coverage. Some insurance companies allow you to add vacant home coverage to your existing policy as an endorsement, while others require a separate policy.
• Shop around and compare quotes: Once you know your current provider's options, it's a good idea to explore other insurance companies to find the best coverage and price. Compare factors such as deductibles, coverage limits, covered and non-covered perils, and status definitions ("unoccupied" vs. "vacant").
• Apply for vacant home insurance: Gather the necessary documents, which may include a government-issued ID, proof of ownership, the estimated value of the home, and the estimated time it will be vacant.
• Consider refund policies: If you need to cancel your vacant home insurance before the policy expires, ask about refund policies. Some insurers will refund premium amounts if you end your coverage early.
• Explore cost-saving measures: Vacant home insurance can be expensive, but there are ways to reduce costs. Installing security measures such as smoke alarms, carbon monoxide detectors, and security systems may qualify you for discounts. Having someone maintain the property and regularly check on the home can also help reduce the risk and lower premiums.

Remember, vacant home insurance is typically needed in specific situations where a home will be empty for an extended period, such as when selling a home, renovating, or travelling for an extended period. It's important to understand the difference between an "unoccupied" and a "vacant" home, as insurance companies make this distinction and it will impact your insurance rates.

How much does vacant home insurance cost?

Vacant home insurance is typically 50% to 60% more expensive than a standard home insurance policy. This means that if a standard policy costs $1,200 per year, a vacant home insurance policy will likely cost between $1,800 and $3,000 per year. However, some estimates suggest that vacant home insurance could cost two to three times as much as standard home insurance.

The higher cost of vacant home insurance is due to the increased risks associated with unoccupied properties. Vacant homes are more susceptible to theft, vandalism, and damage from fires, storms, and burst pipes, as there is no one present to mitigate these issues. Additionally, vacant homes often lack the signs of occupancy that deter thieves and vandals.

The cost of vacant home insurance also depends on several factors, including the insurance company, the type of policy, the property being insured, the location, and the size of the home. It's important to note that not all insurance companies provide vacant home insurance, so you may need to shop around and compare quotes to find the best coverage and price.

Some ways to save money on vacant home insurance include:

• Providing a reason for the vacancy, such as renovations or a firm "sell date".
• Improving the condition of the property before purchasing insurance.
• Installing safety and security features, such as a security system and deadbolt locks.
• Bundling insurance products with your current insurer.
• Having someone regularly monitor the property, such as a contractor, real estate agent, or neighbour.

Frequently asked questions