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Unoccupied & Vacant Home Insurance
Standard homeowners insurance typically covers risks listed in your policy. However, most homeowners insurance policies do not cover unoccupied or vacant homes. There is a misconception that if a home is vacant or unoccupied, it is safe. That’s not true. Vacant/unoccupied homes are prone to vandalism, theft, and squatters, and that’s a risk. Therefore, you should consider purchasing unoccupied or vacant home insurance if your home is unoccupied.
What is Unoccupied or Vacant Home Insurance?
There are numerous reasons why your home can be vacant or unoccupied. You might be planning renovations or selling your home. Whatever the reason, it is crucial to protect your property. Luckily, homeowners insurance companies offer unoccupied or vacant insurance either as an endorsement or an add-on. According to the International Risk Management Institute, homeowners insurance providers usually do not renew your homeowners policy if the home is unoccupied.
What is a Vacant and Unoccupied Home?
A home is considered unoccupied if personal belongings exist and no one lives there. However, if the house has no belongings, it is considered vacant. It is crucial to inquire from your insurance provider because the vacant and unoccupied home definition varies. Here are common scenarios you might need unoccupied home insurance:
- If you are doing renovations, repairs, or building work that involve you moving out
- If you are waiting to sell or probate
- If you have purchased a home and you don’t plan on moving in for a while, maybe a month
- If the occupier is taken into care
- If it is a holiday home, i.e., second property that’s not your primary residence
- If you are a landlord and your property is unoccupied
Unoccupied homes are at a higher risk of theft, vandalism, fire, and water damage. With such risks, unoccupied home insurance is higher than standard homeowners insurance. Ergo, you need to look for an insurer offering reasonable premiums and extensive coverage. Let’s cover some of the reasons why unoccupied or vacant insurance is inevitable:
Renting or selling
Unoccupied insurance is vital if you are a landlord and your property is in between tenants. Alternatively, if you purchased a home and are wondering whether you should rent or sell your original home, consulting an insurance agent is the right choice. Insurance brokers can offer professional advice on getting an endorsement or purchasing a new policy to protect your old home.
Traveling
Traveling or vacationing is a great idea, but your home will be vulnerable to burglaries or fire. If you plan to travel for a few weeks or months, consult an insurance broker. If you have homeowners insurance, getting an endorsement is the ideal option. With coverage, you will have peace of mind while on vacation, knowing that your home and valuable assets are protected.
Medical treatment
Unoccupied home insurance is crucial if the occupier is hospitalized or taken into care. Suppose you are involved in an accident or suffering a severe injury or illness requiring hospitalization or prolonged hospital stays. In that case, your homeowners insurance provider might cancel or fail to renew your policy. Although you have several options to choose from, for example, asking a close family member to check your home, an unoccupied policy can come in handy.
Renovations
If you are renovating your home or doing building work that requires you and your family to vacate for several weeks or months, talk to your insurance provider. Besides attracting thieves, a home under renovation is at risk of damage, and only an endorsement can cover possible damages.
Vacation home
If you own more than one home, there is a possibility that one house is unoccupied at any given time. Vacation homes are great because you can spend time with family and friends. While some prefer switching from vacant home insurance to homeowners insurance, the process is daunting and time-consuming. Depending on your insurance provider, you might qualify for vacation and seasonal home insurance to protect both homes. It is alright to consult your insurance broker to avoid making costly mistakes.
Apartment
If you rent an apartment, you do not need vacant or unoccupied insurance if you plan to go on a holiday or travel for an extended period. Your renters insurance provides the required coverage. However, if you own the apartment, you must purchase a vacant insurance policy to protect your personal items while away.
The Different Types of Vacant Insurance Coverage You Can Purchase
Actual cash value
If disaster strikes and a named peril destroys your home or personal belongings, the actual cash value covers the cost of repairing or replacing the property minus the depreciation cost. Therefore, the insurer will determine the actual cost of the property and then reimburse the loss.
Agreed loss settlement
You can agree on a settlement amount if a covered event damages your home. Your insurance provider will pay the amount agreed upon minus the deductibles. A deductible is an amount you pay out of pocket before the insurance company pays for the loss.
Vandalism
Since no one is in the vicinity to inform the police or relevant authorities, you need this coverage to cover vandalism and any malicious damage.
Liability coverage
You might be liable for bodily injury or property damage even if a home is vacant or unoccupied. With liability coverage, you can rest assured that the insurer will cover legal costs and settlements.
Named peril coverage
Although named peril coverage excludes vandalism, you can include the following perils: explosion, hail damage, fire, lightning, and windstorms. Remember, unnamed risks are not covered. This means that you must get add-on coverage to cover unincluded perils.
How Much is Vacant Home Insurance?
The cost of the policy varies based on the provider, your home’s risk profile, and the policy you choose. Unoccupied or vacant homes are at a higher risk of damage, so these policies are expensive. Typically, unoccupied or vacant home insurance costs at least twice or thrice the cost of standard homeowners insurance! In any case, you should consider purchasing unoccupied home insurance to avoid hefty financial losses.
Conclusion
If you will leave your home vacant for a month, whether it is a vacation home or the property is under renovation, consider purchasing vacant home insurance. The policy offers peace of mind and protects your finances since your home could be susceptible to vandalism, physical damage, and theft while no one lives there. When shopping for a vacant home policy, compare different quotes from different insurance providers to ensure you are fully covered. Always compare prices, the excess they need, the quality of cover, and feedback from other homeowners to find a policy that matches your needs. Call us Today to see uif your home is considered 'Vacant' and how to properly insure it.