Most homeowners insurance policies won’t cover damages if a home has been vacant for more than 30 days. This is why vacant home insurance is so important. It protects the homeowner from losses due to fire, liability, vandalism, and more when a home remains unoccupied for any length of time.
Vacant home insurance is typically used when a home is for sale without owners residing in it, snowbird homes left vacant for extended periods of the year when homeowners are at another location, or homes being renovated waiting for new tenants to move in.
What Is Vacant Home Insurance?
Vacant home insurance is a type of homeowners insurance policy covering you against losses when the home remains vacant for extended periods of time. The policy can actually be a standalone policy or written as an endorsement to your existing homeowners policy. Endorsements are most useful when the homeowner still resides in the home for part of the year but still needs the coverage when they are away on vacation or for seasonal moves.
Most homeowners policies will continue to cover a home for up to 30 days while some will do so for up to 60 days.
Unoccupied vs. Vacant Home Insurance
Depending on the insurance company, how you define your home will determine the type of insurance that you need for proper coverage. As such, they may define unoccupied and vacant homes differently.
An unoccupied home is one that has all the homeowners’ belongings in the home but they are not living in it at the time of coverage. In other words, someone can come home at any time and be considered living there. A vacant home typically is one that is absent of belongings within it though there may be limited items such as appliances remaining. Vacant homes would typically need someone to move in to be considered occupied.
Talk to your insurance agent to make sure that you have the right coverage based on the carrier’s definition of unoccupied or vacant. In many cases, unoccupied properties just need an endorsement added to the existing homeowners policy to add protection while no one is there to manage the house.
When To Ask for Vacant Home Insurance
There are many circumstances that might require vacant or unoccupied home insurance. Be sure to talk to your insurance agent if you:
- Own a vacation home used sparingly throughout the year
- Purchased a home but will have time before you move in
- Travel away from home for weeks on end
- Plan on having a medical procedure where you will be hospitalized for an extended period of time
- Bought a home but are unable to move into it immediately
- Remodeling a home before you move in
- Are between tenants on a rental property
What Does Vacant Home Insurance Cover
Vacant home insurance covers you for the same types of losses that would occur in a homeowners insurance policy. These perils include:
- Fire and lightning
- Burst pipes
- And more
Most vacant home policies will be a named peril policy meaning anything listed in the policy is covered while excluding anything not specifically named. Note that you may also need to purchase flood, earthquake, or hurricane insurance to be fully protected.
It is important to note that vandalism and theft coverage does vary from provider to provider, so be sure to ask your agent about the coverage.
Risks of Vacant Home
Vacant home insurance is typically more expensive than occupied homeowners insurance. You wouldn’t be alone if you wondered why, after all, it’s the same house in the same location.
The reason vacant home insurance is more expensive is that it is a high-risk property. It is high-risk because there is no one on the property to manage and make claims. This means that damage can happen without anyone being aware of it for any considerable amount of time. Imagine if a pipe burst in the vacant home – it might take weeks or months before someone realizes the problem and the damage would be that much more because the water was on for all that time.
Plus vacant homes tend to be targeted by vandals and squatters. They see that the lights don’t come on and no one is around and decide that it’s a good place for mischief or residence.
Costs of Vacant Home Insurance
Vacant home insurance is more expensive than traditional homeowners insurance. If you are able to add an endorsement on to an existing policy, you may be looking at a 10% to 20% increase in costs. However, if you have to buy a standalone policy, you could be looking at paying upwards of 50% than you would for a traditional homeowners policy.
Lowering the Costs of Vacant Home Insurance
Talk to your insurance representative about your vacant property. There are often discounts or premium credits offered for a variety of reasons.
You may be eligible for lower vacant home insurance if you:
- Have a contracted property manager maintaining the property regularly
- Visit the vacant property several times per week
- Have security systems installed on the vacant property
- Have water sensors installed to detect burst pipes and water leaks
- Bundle with other home or auto insurance policies
Be sure to ask what you can do to keep costs down when you have a vacant property.