Vacant Home Insurance: Do You Need It? What Does It Cover?

Homeowners insurance is meant to cover financial losses caused by theft, fire, and other covered dangers in your principal residence. If you own a home that has been vacant for a long time, you may be wondering if your insurance coverage will still cover you if damage occurs. It's probable that your ordinary insurance won't be enough to cover a house that isn't being used. To bridge a coverage gap, you may need to obtain a vacant home insurance policy.

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KEY TAKEAWAYS

• Your regular homeowners insurance policy may not extend to a home that’s vacant. 
• Vacant home insurance policies are designed to cover homes that are vacant because they’re in the process of being sold, undergoing repairs or renovations, or otherwise not being lived in on a full-time basis. 
• Vacant home insurance can be its own policy or added on to an existing homeowners insurance policy as an endorsement. 
• Coverage limits, covered events, and premiums for vacant home insurance policies can vary greatly. 

What Is Vacant Home Insurance and How Does It Work?

To determine whether you require vacant home insurance, you must first understand what it is and when it may be required. Vacant home insurance is available as a standalone policy or as an endorsement to an existing homeowners policy. Its purpose is to safeguard homes that have been vacant for a lengthy period of time. Traditional homeowners insurance covers you for as long as you own and live in the house.

The length of time a home must be considered vacant is determined by the insurance company. For example, if no one has lived in a home for at least 30 days, some insurance companies may consider it unoccupied. Other insurers may allow up to 60 days for a home to be considered empty.

What Does Vacant Home Insurance Cover?

Vacant home insurance is designed to offer protections that are similar to a standard homeowners insurance policy. For example, your vacant home insurance policy may cover you for damage from things such as: 

• Theft
• Vandalism
• Fire
• Explosions
• Wind
• Hail
• Lightning

Your insurance should include a comprehensive list of covered dangers as well as any coverage exclusions. Although it does not cover everything, vacant home insurance can cover the most common sorts of damage that might occur when no one is living in a home. If your home is in a flood plain, for example, you may need to obtain flood insurance separately.

Depending on the insurer, vacant home insurance policies might have adjustable periods ranging from three to twelve months. The types of residences that can be covered by your insurance carrier may have certain limitations. You could be able to purchase vacant home insurance for up to a four-unit building, or you might only be able to insure a single-family home. Insurers consider the home's age, overall condition, and estimated replacement value, as well as how it is utilized and why it is empty.

Insurance companies consider a vacant property to be a higher risk than one that is occupied full-time. Because there is no one on site to keep an eye on the property, it is more probable that vandalism or other mischief may occur. Furthermore, without regular maintenance and care, the risk of water and fire damage grows. If you need vacant home insurance for an older property or one that wasn't properly maintained when you bought it, your risk profile and premiums may rise.

Who Needs Vacant Home Insurance in the First Place?

Vacant home insurance is usually only required in select circumstances, such as when a property you own will be vacant for an extended length of time. The following are some of the scenarios that may necessitate vacant home insurance:

Performing extensive renovations or repairs on a home that makes it temporarily inhabitable

Being hospitalized for an extended period of time for medical care 

Owning a vacation home that you only use a few months out of the year

Selling a home that you no longer live in because you've moved into a new property 

Owning a rental property that sits vacant during the off-season

If you're on active duty military service or traveling for a lengthy period of time, you may need unoccupied home insurance. However, keep in mind that for a home to be termed vacant, it must be absolutely devoid of all personal possessions.

How to Get Vacant Home Insurance 

Before you get vacant home insurance, you should figure out whether you need a separate policy or if you can just add an endorsement to your existing homeowners insurance policy. An endorsement can be used to add coverage to an existing policy to cover temporary vacancies in the house. Let's say you own a rental property and your tenant has given notice. You estimate that finding a substitute tenant and getting them moved in will take a month or two. You may be able to utilize an endorsement to change the coverage of your current policy until the house is inhabited once more.

The next step is comparing rates and coverage options for vacant home insurance policies. Every insurance company is different when it comes to things such as:

• Property types
• Vacancy reasons
• Covered and non-covered perils
• Coverage limits
• Premiums and deductibles
• Coverage terms
• Status definition (“unoccupied” versus “vacant,” for example)

The cost of vacant home insurance varies depending on the insurance company and the specifics of your policy. A four-unit rental house will almost certainly cost more to insure than a single-family vacation home. Obtaining estimates from a variety of insurance firms can aid in the search for a low-cost policy.

There are a few things you can do to lower the house's risk profile and lower the cost of a vacant home coverage. Installing smoke alarms, carbon monoxide detectors, and/or a security system may entitle you to insurance discounts. Having someone take care of external gardening and maintenance, as well as checking on the house on a regular basis, could assist the insurer reduce risk and lower your premiums.

Consider how long you'll need insurance to cover a vacant home when purchasing it. If your house is on the market and you're waiting for a good offer, this might be difficult. If you're buying a vacant house with the intention of renting it out later, check with your insurance carrier to see if the policy may be converted to a landlord coverage after the house is occupied. These pointers can assist you avoid paying for more coverage than you require or the incorrect sort of coverage.