Empty homes can become targets for a variety of risks, make sure your investment is protected with vacant property insurance.
What is Vacant Property Insurance?
Vacant Property or Unoccupied Home Insurance is a policy that covers the structure and contents of a home which is left unoccupied for 30 days or more. Once a property has had no residents for 30 days Insurance companies see it as a higher risk of being susceptible to vandals and burgulars, or suffering damage due to weather events, which left unresolved could lead to a complete loss of the property. As such a standard homeowners policy will not cover the property while empty.
Unoccupied or Vacant?
Although the terms Vacant Property and Unoccupied property are often seen as interchangeable these are actually two different property states and carry different levels of risk, which affects the premium.
- The Utilities are turned off / disconnected
- There are no Appliances
- There are no Furniture or Personal Belongings inside
- Property is in need of repair
- The Utilities are on
- Appliances are installed
- Furniture and Personal Belongings are inside
- Property is move-in ready
Make sure that you talk to your advisor about why your house is empty, what condition it is in and how often someone will be checking on it. Your advisor can then ensure that the property is properly classified as either vacant or unoccupied. Usually an Unoccupied Property is considered to be less risk than a Vacant Property and premiums will be lower.
What does Vacant Property Insurance cover?
A Vacant / Unoccupied policy provides the same coverages a standard Homeowners Policy provides and then adds additional coverages:
- Vandalism - Damage / Graffiti intentionally done to the property
- Named Perils - Fire, Storm, Waterloss etc.
- Total / Partial Loss - Covers Repairs or Replacements to part of / the entire property
- Liability - Covers claims made against you for bodily injury or property damage sustained by others while on your property
What does Vacant Property Insurance cost?
Due to the increased risk, Vacant Property is more expensive than a homeowners policy, policies generally cost between 50% to 150% more than homeowners policies. However, there are some steps you can take to lower the premiums:
- Make sure the property has a security system, this reduces the chances of the property being broken into while empty.
- Ensure the property is monitored, whether by a real estate agent or a contractor, having someone check on the condition of the property reduces the risk of total loss.
- Minimize the time the property is vacant, the shorter the period of time the property is empty the less the risk of loss.
Frequently Asked Questions
If my property becomes vacant do I add vacant cover to it or is it a new policy?
This depends on the insurance company providing your existing homeowners policy, some cancel the homeowners policy and replace it with a vacant property insurance while others will add it as an addendum. Tell your advisor of any changes to the circumstances of your property and they will make sure you have the right cover in place.