Empty homes provide a greater insurance risk and that is why some companies drop or deny coverage. You may not need special coverage, but an insurance endorsement may satisfy your insurance provider
Here is what you need to know about vacant home insurance.
1. Review your home insurance policy. If you already have homeowner’s insurance, you’ll need to pull out your policy and review it. Read carefully through the exclusions, searching for words such as “neglect” or “abandonment of property.”
You may not have the intention to abandon or neglect your property, but your insurer may not see it that way. If you plan to leave your home empty for at least 30 days, your insurer must be notified.
2. Ask for an endorsement. If you’re lucky, your insurance company has a resolution for your vacant home. Specifically, an endorsement that covers damage, what is normally excluded if the home is vacant, namely glass breakage and vandalism.
If an endorsement is available, it typically will run concurrent with your existing policy. Some insurers, however, place a limit or will revisit the vacancy after a few months. You should be able to obtain an endorsement that can be canceled once the home is occupied. Expect to pay at least $100 for such coverage.
3. Search for special vacant insurance coverage. If your insurer won’t extend an endorsement, then you will need to seek coverage elsewhere. Look for traditional homeowners insurance with an endorsement through competing companies.
If your search is in vain, search for companies that offer special vacant home insurance. The underwriting requirements are often different and may require that you leave the utilities on, have the lawn maintained, and inspect the property regularly. A higher deductible will likely apply.
Know that vacant home insurance usually is capped to cover home only up to a certain amount. For instance, Farmers Insurance offers coverage for homes valued to $1 million. Choose coverage that provides an actual cash value in the event of covered loss.
Insurance Considerations
If your home is vacant, but will soon be occupied by tenants, you’re not entirely off the hook. In such cases you’ll need to obtain a rental dwelling policy, what covers the additional risk of having someone else live in the home who is not the homeowner. Always maintain the right insurance for your current needs or risk having your claim denied.
See Also — Is Your Homeowner’s Insurance Adequate?
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