If you leave your home unattended for weeks at a time, your homeowners policy likely won’t provide coverage in the event of a claim during the time it is unoccupied or vacant. As a result, any damages or losses that occur would have to be paid out of pocket. For these times, unoccupied and vacant home insurance products offer coverage for claims that would otherwise go unpaid by your home insurance company.
What is Unoccupied and Vacant Home Insurance?
Unoccupied and vacant home insurance are specialty insurance products that are designed to provide financial protection from damage or loss of a home that is uninhabited. Typical homeowners insurance policies won’t cover fire, vandalism, liability or other types of claims on an unoccupied or vacant property. For example, if you leave your home for a few months and there is a fire, unoccupied and vacant home insurance would provide coverage where you standard homeowners policy wouldn’t.
This type of insurance product can be purchased as a separate policy or as an endorsement. If it’s purchased as a separate policy, you’ll no longer need to pay a standard homeowners policy. However, if it is purchased as an endorsement, it serves as an add-on to your existing homeowners policy.
Unoccupied and vacant homes present a greater insurance risk than occupied homes for many reasons, including slower emergency response times and the increased probability of a break-in occurring. For instance, assuming there were fires on the premises of two homes- an occupied home and a vacant home- the fire taking place at the former would, in theory, result in lesser damage since it would likely be reported first by its inhabitants and would be put out more quickly.
The increased insurance risk associated with unoccupied and vacant homes has resulted in insurance companies’ excluding these properties in standard insurance policies. As a result, homeowners who want coverage for an empty or uninhabited home need to purchase unoccupied or vacant home insurance.
Do You Need Unoccupied or Vacant Home Insurance?
Generally, if you plan to leave your home vacant or unoccupied for 30 days or more, you’ll want to purchase unoccupied or vacant home insurance. While terms vary by policy, most insurance companies will deny claims that are made if your home is left alone for longer than 30 days. Before leaving your home unattended for a long period of time, you should speak to your insurer and ask how the company defines vacancy and unoccupancy. It’s possible that your property insurance company may have specific restrictions around the length of time you can leave your home unattended.
Below, we provide a list of common scenarios where a homeowner might find the need for unoccupied or vacant home insurance:
- You own a vacation home, which you only visit a few times per year.
- You’ve purchased a home, but you won’t move in for several weeks.
- You’re constantly traveling for weeks at a time.
- You have to undergo a medical treatment, which requires you to be in the hospital for weeks.
- You’re remodeling a home and aren’t living there while the renovations are taking place.
- You’re renting out a home and are in between finding tenants.
Do I have an Unoccupied or Vacant House?
An “unoccupied” home is one that is ready to be used as a residence, meaning that there is furniture in place and utilities are set up. On the other hand a “vacant” house typically doesn’t have any personal property contained within it. However, vacant homes pose a higher risk to insurance companies than unoccupied homes, because unoccupied-home claims are likely to be reported sooner than those made for vacant homes. As a result, any damages that could occur, such as water backup in the home, would likely be less severe in the unoccupied home, resulting in a lower cost to the insurance company. The determination of whether your house is vacant or unoccupied will have a large effect on your insurance rates.
Purchasing Unoccupied or Vacant Home Insurance
Homeowners who are looking to purchase unoccupied and vacant home insurance can likely do so through their current home insurance company. Some large national insurance companies, like State Farm and Farmers, offer coverage for these types of homes through endorsements or separate policies. You should be prepared to pay around 50% more for unoccupied or vacant home insurance than you would for a regular homeowners policy. The national average annual cost of homeowners insurance is $1,083, and most homeowners should expect to pay approximately $500 per year more for unoccupied and vacant house insurance.
Source: Value Penguin