TABLE OF CONTENTS
- Part 1 of 4: What is vacant home insurance?
- Part 2 of 4: Reasons for an empty home
- Part 3 of 4: Risks of a vacant home
Home insurance companies look at a vacant home a lot differently than one you occupy full time. A vacant home is usually defined as one that you no longer live in, have moved all of your furniture out of, and have turned off some, if not all, of the utilities.
Vacant home insurance can protect your investment in your home when you no longer live there, including when you travel for an extended amount of time, want to sell your home, or plan on renting it out.
In the article below, Part 1 defines vacant home insurance, Part 2 states the reasons for an unoccupied or vacant home, Part 3 addresses the risks of a vacant home, and Part 4 talks about how to get vacant home insurance.
Part 1 of 4: What is vacant home insurance?
Vacant home insurance covers your home if your insurer considers it vacant. While costing one-and-a-half to three times as much as regular home insurance, according to Assuranceagency.com, vacant home insurance protects your home from various perils, such as fire, explosion, lightning, windstorm, and hail damage.
In addition, make sure to check that the insurance also covers acts of vandalism or malicious mischief. Many vacant home insurance policies also provide a certain amount of liability insurance.
Part 2 of 4: Reasons for an empty home
The reasons for a home to become vacant or unoccupied range from an extended vacation to having moved into a new home while trying to sell your old house. The reason behind the vacant status of the home determines what you need to do to address it, as detailed below.
- Vacation: If you plan on taking an extended vacation, you need to notify your home insurance company if you plan on being away for longer than 30 to 60 days. Most home insurance policies have an exclusion within them stating that you must notify an agent if you plan on not residing in the property for longer than a specified amount of time. Most insurance companies allow you to buy extra coverage, called an endorsement, which covers the exclusion. You might also need to purchase vacant home insurance if the company does not offer endorsements.
- Second home: Staying in a home only part of the year, such as with a vacation home, can also qualify it as a vacant home. If you only occupy the home for part of the year, you need to have seasonal or vacation home coverage.
- Selling: When selling a home, it might go through a period of having no one living in it. When you sell a home and expect it to remain vacant for some time, talk to an agent with your home insurance company. Most insurance companies require homeowners to acquire an endorsement or vacant home insurance policy in this case.
- Renting: Renting a home provides a nice source of income, but what happens to your home insurance when in between tenants? Just like when you sell your home, you must properly insure your property when it’s vacant for extended periods of time through either an endorsement or separate vacant home insurance.
In addition to vacant home insurance or an endorsement, you also need to look into getting landlord or property insurance, which offers additional protection on top of your regular home insurance. Property management represents another consideration, especially if you live in another country than where the home is located. The easiest way to do this from abroad is to hire a trusted property management company.
- Renovating: Renovations and repairs that require you to move out of your home for an extended time represent another reason for purchasing vacant home insurance. In addition, make sure you have the appropriate amount of liability insurance on your property in case someone gets injured while working there.
- Medical treatment: Medical treatment that requires you to stay away from home for an extended length of time can also increase the risks to your home in the view of your home insurance company. In such cases, you might give another family member power of attorney to take care of things in your absence, including your home. Have the family member check with the home insurance company to see what they need to do to avoid having the home declared vacant.
Part 3 of 4: Risks of a vacant home
If your home is vacant, the insurance companies consider it more of a risk because no one is around to take care of the property. Some of the added risks that a vacant home presents to an insurance company include:
- Increased chances of theft or vandalism
- Liability issues from injuries that happen on the property
- Undetected repairs that grow worse
- Fire damage
- Water and extreme weather damage
Part 4 of 4: How to get vacant home insurance
Talk to an agent with your home insurance company if you expect your home to be vacant for a longer time than allowed within your home insurance policy. When acquiring vacant home insurance, you need to start a new policy. Your old homeowner’s policy then is no longer in effect.
When purchasing a policy, make sure to get enough to cover the value of your home. To save money, you can increase your deductible, the amount you must pay for any damages before insurance kicks in, which should bring your vacant home insurance premiums down. Only take this step if you have enough money to cover the deductible if something does happen to your home while it’s vacant.