4 min read
January 21, 2020
Original article that this information was pulled from is located here.
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.
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 your 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 for a standard homeowners policy. However, if it’s 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.
The increased insurance risk associated with unoccupied and vacant homes has resulted in insurance companies’ excluding these properties in standard property insurance policies. As a result, homeowners who want coverage for an empty or uninhabited home need to purchase unoccupied or vacant home insurance.
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.
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. Most homeowners should expect to pay about $500 more per year for unoccupied and vacant house insurance, increasing their average annual cost of homeowners insurance.
Although it may be pricey up front, having the correct insurance in place is so important in protecting your investment. Last thing you would want is to file a claim, insurance denies you, and now you are paying for repairs out of pocket.
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