Unoccupied and Vacant House Insurance

September 19, 2018

Unoccupied or vacant home insurance is a type of insurance policy that covers houses that are temporarily unoccupied or vacant. You may find yourself in this situation for a number of reasons such as:

  • Extensive renovations that keep you from staying there
  • Waiting for a home to sell
  • Bought a new home but won’t be moving in for several weeks
  • In between tenants or unable to find a tenant
  • Relocating for a new job but your old house stands empty
  • Undergoing a medical treatment that requires you to be in the hospital for weeks
  • Constantly traveling for weeks at a time
  • Owning a second-home or vacation home that you only visit a few time a year
  • Waiting for a probate (proving of a will)

Your property is considered to be “vacant” or “unoccupied” if it stands empty for a period of 60 days or more and does not have a certificate of occupancy, according to the National Association of Insurance Commissioners. For example, this could mean having no utilities for the period. Leaving your home unoccupied for even a few weeks can void your home insurance altogether. This is because vacant or unoccupied homes are at greater risk for vandalism, theft and other perils.

Vacant Vs. Unoccupied

Insurance companies differentiate “unoccupied” and “vacant homes”. An unoccupied home is one that is ready to be used as a residence. It has furniture and the owner’s personal property remains inside. The utilities are on and appliances are functioning. If you are on vacation or in the hospital, your home is considered to be unoccupied. If your home renovation is limited enough that personal property like furniture can be left inside, the house is considered to be unoccupied.

A vacant home usually doesn’t have any personal property and the utilities may be shut off. Vacant homes are common when the home is on the marketed or being rented. Generally, vacant homes have a higher risk to insurance companies than unoccupied homes because unoccupied-home claims are likely to be reported sooner than vacant-home claims.  Because of this, vacant home insurance policies are more expensive, typically 50% more expensive than typical homeowners insurance policies.

Unoccupied and Vacant Policy Coverage

An unoccupied home insurance policy covers almost everything a standard home policy would cover with a few exclusions. You can expect to have dwelling and other structures covered for the actual cash value. Replacement cost coverage may be hard to come by. Liability coverage may also be available depending on your insurance company. You can also purchase insurance for the home’s contents.

Even though the policy may have some exclusions, you can counter this by endorsing the policy with more coverage. For example, if liability coverage is excluded you may want to add it on as you are still legally liable for bodily injury someone may suffer on your vacant property. Vandalism and malicious mischief coverage may also be necessary depending on the location of the home since unoccupied homes are most often targeted for this type of activity. In addition, theft may not be covered unless added by request.

Cost Factors of Unoccupied or Vacant Home Insurance

  • Length of vacancy
    Usually, the shorter the vacancy, the lower the risk and the lower the insurance premium.
  • Reason for vacancy
    If the house is vacant because the owner is renovating or suffered a medical emergency, it will typically be less expensive to insure than if the property is simply vacant with no future occupancy plans.
  • Security system
    The presence of a security system usually gives a small discount on the premium.
  • Property condition 
    Generally, the better the condition of the property, the less expensive the policy will cost.
  • Location
    If the house is located in a neighborhood with multiple boarded-up houses or in proximity to high-crime areas, the cost of insuring it may increase.
  • Fair market value
    Properties with a high fair market value usually have a higher replacement cost, so are typically more expensive to insure.

Contact us!

Think you may need vacant or unoccupied home coverage? Not sure if you have the adequate home insurance coverage you need? Have any questions or concerns about your policy? Don’t hesitate to contact us today – just give us a call at 415-386-2283 or send us a message at [email protected]!