People own unoccupied homes for different reasons. You may be living elsewhere while doing extensive renovations, or you may be traveling for an extended period of time.
You may have put your home on the market and left it vacant after you moved into a new house. If your home is unoccupied, certain coverage may be limited on your homeowners policy. At that point, you may need vacant home insurance to cover your liability risks.
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Risks to Vacant Homes
- Theft and vandalism
- Insect infestation
- Frozen or broken pipes
What Is Vacant House Insurance?
Vacant home insurance is available for houses that will be unoccupied for an extended period of time, including:
- Houses vacant for a minimum of 3 months and up to 36 months
- Unoccupied homes on the market
- Homes in foreclosure
- Vacant homes under renovation
Some companies offer insurance for vacant homes as an addendum to an existing homeowners policy. Other insurance companies are hesitant to provide coverage to vacant homes due to the many risks they face, so you may need to shop around for specialty coverage.
A vacant home policy may have time limits and other stipulations, so it’s important to do your research.
How Much Coverage Do I Need for a Vacant Home?
The amount of coverage you need will depend on several factors. Most importantly, always insure for the replacement cost value if you can. The longer the house is vacant, the greater risk that it may be vandalized or experience other damage due to the fact that no one is there to monitor the home heating, electrical, and plumbing.
Vacant property insurance will typically cover physical damage to your home, including weather damage and vandalism.
If you have detached structures or other personal property, consider adding additional vacant property insurance coverage for these structures. This will help ensure that if someone is injured on your vacant property and files a lawsuit against you, you’re protected.
How Much Does Vacant Home Insurance Cost?
Because certain risks increase with an unoccupied property, vacant house insurance is typically more expensive than a standard homeowner policy. If you’re only adding an addendum to your current policy, it may be more affordable, but just make sure it includes all the coverage you need.
Fortunately, insurers will typically return any unused premiums if the house becomes occupied before the end of the policy’s time period.
Factors that affect your premium can include your geographic location, the home’s value, the amount of coverage you purchase, and the safety of the house. Since risk is the biggest concern for insurance companies, you may be able to reduce your rates if you have a home security system.
When Do You Need Vacant House Insurance?
If you know your home is going to be unoccupied for a lengthy period of time, check your current homeowners policy. Your insurance company may be willing to work with you to ensure that your home’s coverage continues during that vacancy.
For example, your insurance company may extend your current policy for a specific time period, after which you would need to purchase additional coverage.
When you’re actively trying to rent your home, you may not need vacant house insurance if you expect it to be occupied within a short span of time. If you’re currently renovating it to rent to someone next year, vacant home insurance will protect your investment.
Vacant property insurance may be a wise investment if your home is on the market, especially because it’s hard to predict when a house will sell. Just make sure you purchase a policy that will refund premiums if the house becomes occupied.
Anytime your personal home or rental properties are vacant for an extended period of time, you may need vacant house insurance to protect yourself from liability claims and other risks.
How Do I Get Vacant Home Insurance?
You can check with your current insurance company. Vacant house insurance is considered a specialty product, so you may need to find another insurer. You want to make sure you have the best information to make an informed decision.
First, take a look at insurance rating agencies, like A.M. Best and S&P to make sure you're working with a highly rated company. You can do a quick online search to find this information, but getting the quotes might be tougher. From there, make sure you're comparing a few quotes before you buy.
This is the only way to make sure you've got a good idea of the fair market price for the coverage you need. Just make sure that every rate quote is for similar coverage, because different policies could have different deductible amounts or liability coverage amounts. So make sure you specify what you're looking for when you talk to an independent agent.