Vacant Homes: Insurable?

Vacant homes are more vulnerable to theft, vandalism, and damage, and insurance companies are reluctant to take on the additional risk and expense. As a result, typical homeowners insurance policies don't cover vacant homes, and you'll need to purchase a separate policy or an endorsement to your existing policy. This type of insurance is more expensive than standard homeowners insurance, reflecting the higher risk of vacant properties. The increased risk is due to factors such as slower emergency response times and a higher probability of break-ins.

Vacant vs unoccupied homes

When it comes to insurance, the terms "vacant" and "unoccupied" are not interchangeable. Vacant homes are completely empty, or close to it, lacking both people and personal property. Unoccupied homes, on the other hand, still contain furniture and other possessions as if the owners were to return at any time. Utilities may still be connected in unoccupied homes, but they are often turned off in vacant properties.

Vacant homes pose a greater risk to insurance companies than unoccupied homes. This is because claims for vacant properties are likely to be reported later and result in more severe damage. For example, a fire in a vacant home is likely to cause more damage as it would be reported later and take longer to put out. As a result, vacant homes are more expensive to insure and some insurers do not offer coverage for them.

If you plan to leave your home vacant or unoccupied for 30 days or more, you will need to purchase unoccupied or vacant home insurance. This type of insurance can be purchased as a separate policy or as an endorsement to your existing homeowners policy. It is important to speak to your insurer about their specific definitions of vacancy and unoccupancy, as well as any restrictions on the length of time your home can be left unattended.

To keep a vacant or unoccupied home safe, it is recommended to keep up with yard work, install strong locks and security systems, use smart-home devices, have someone regularly check on the house, and set up motion-sensor lights and timers for interior lights to make the house appear occupied.

The cost of vacant home insurance

Vacant home insurance is typically more expensive than a standard home insurance policy. This is because vacant homes are seen as a higher insurance risk, as they are more vulnerable to theft, vandalism, and damage. With no one living in the property, issues like a burst pipe or a fire may go unnoticed and lead to more extensive and costly repairs.

On average, vacant home insurance costs 50% to 60% more than a standard insurance policy for an occupied home. For example, if the insurance premium for an occupied home is $1,200 per year, the premium for vacant home insurance is likely to be between $1,800 and $3,000 annually. However, some estimates suggest that vacant home insurance could cost two to three times more than standard home insurance.

It is worth noting that the terms "vacant" and "unoccupied" are not interchangeable when it comes to insurance. A vacant home is one that is empty of both people and personal property, while an unoccupied home has residents who are temporarily away but still have their belongings inside. Most insurers consider a home vacant or unoccupied if it has been uninhabited for over 30 days, although this timeframe may vary between insurance companies.

When to get vacant home insurance

Vacant home insurance is a type of insurance coverage for properties that are uninhabited or considered vacant. This type of insurance is important as it provides protection from financial loss due to unexpected damage that happens when homeowners are away for an extended period.

Vacant home insurance is typically required when a home is left vacant for 30 to 60 consecutive days. This time period may vary depending on the insurance company and the specific policy. It is important to review the insurance company's definitions of "vacant" and "unoccupied" as they may differ. Generally, a vacant home is considered to be a property that is empty and not in use for a significant amount of time, with no personal property inside. On the other hand, an unoccupied home may be out of use for a shorter period, and personal property typically remains in the home.

Vacant home insurance can be purchased as a separate policy or as an endorsement to an existing homeowners insurance policy. If purchased as a separate policy, the standard homeowners policy can be discontinued. If purchased as an endorsement, it serves as an add-on to the existing policy.

Some common scenarios where vacant home insurance may be needed include:

• Inheriting a property that is empty until it is sold.
• Owning a vacation home that is only used for a few months out of the year.
• Performing extensive renovations or repairs that make the home temporarily uninhabitable.
• Hospitalization or medical treatment that requires an extended stay away from home.
• Being on active military duty or travelling for an extended period.

It is important to note that the cost of vacant home insurance is typically higher than standard homeowners insurance due to the increased risks associated with vacant properties. The cost will depend on factors such as coverage limits, location, and the condition of the property.

What vacant home insurance covers

Vacant home insurance is designed to offer protections similar to a standard homeowners insurance policy. However, it is worth noting that vacant home insurance policies can vary greatly between providers.

Vacant home insurance policies typically cover damage from:

• Fire
• Lightning
• Explosions
• Windstorms
• Hail
• Smoke
• Water Intrusion

Some vacant home insurance policies may also cover:

• Riot or civil commotion
• Vandalism and mischief
• Other structures (e.g. sheds)
• Personal property
• Liability

Vacant home insurance is generally more expensive than standard homeowners insurance, as vacant homes are considered higher risk. They are more vulnerable to break-ins, vandalism, and undetected damage, such as leaks or fires.

How to purchase vacant home insurance

Vacant homes are often more vulnerable to theft, vandalism, and other damage, so insurance companies may not offer coverage within a typical homeowners insurance policy. This means that if you leave your home vacant or unoccupied for 30 days or more, you will likely need to purchase unoccupied or vacant home insurance. Here is a step-by-step guide on how to purchase vacant home insurance:

• Determine whether you need a vacant home insurance policy: Find out how long your home can sit unoccupied before it is considered vacant, and be honest with your insurance company about the status of your property.
• Check with your current insurance provider: Ask your insurance provider how they handle vacant home coverage. Some insurers allow you to add coverage to an existing policy, while others require a separate policy.
• Shop around and compare quotes: Don't be afraid to explore other insurance companies to find the best coverage and price. Consider factors such as deductibles and coverage limits, in addition to monthly costs.
• 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 ways to reduce the home's risk profile: Installing smoke alarms, carbon monoxide detectors, and/or a security system may qualify you for discounts. Regular maintenance and having someone check on the home can also reduce the risk and potentially lower your premiums.
• Inquire about refund policies: If you need to cancel your coverage before the policy expires, ask about refund policies. Some insurers will refund premium amounts if you end coverage early.

Remember, the cost of vacant home insurance will be higher than a standard insurance policy, and it is important to understand the specific protections offered by your chosen insurance company and policy.

Frequently asked questions