A standard homeowners insurance policy makes a key assumption about the policyholder: that you are a full-time, active resident of the property. If you’re not, then you fall under a different set of rules. Insurance companies classify homes without residents for more than 30 days as vacant or unoccupied. Vacant homes usually fall into the following categories:
- Vacation homes only used for part of the year
- Homes temporarily unoccupied for renovations
- Rental properties without tenants
- Homes for sale when the owner has already moved
If you fall into any of these categories, you will need a special home insurance policy—most carriers do not offer this automatically.
Why do insurance companies insist on special coverage for unoccupied homes?
It may seem strange to many homeowners that their insurance company thinks that covering their home is suddenly riskier if they’re gone for a few weeks. Bad things can happen when you’re at home, too, right? That’s true but an unoccupied home poses additional challenges including the following:
- Higher risk of vandalism and theft – Individuals looking to burglarize homes often monitor neighborhoods to figure out patterns and find out who isn’t at home. They may be able to get in and out of your house without any of your neighbors noticing. In addition, kids from your area may target your house as a hangout or party spot if they know you aren’t there.
- Delayed emergency services – Imagine if there was a small electrical fire in your home. If you were there, you would put it out on your own or be able to quickly contact the fire department. When your house is vacant, it may take a long time for a neighbor to notice something like this and much more damage will be done before emergency services make it to your home.
- Unaddressed maintenance issues – When you’re at home, you notice things like cracks in the walls, a leaky roof, or issues with the plumbing. While these are all small problems initially, they can cause major damage to your home when left unchecked.
How can I make my unoccupied home safer?
You’ll still need additional insurance for your vacant home, but doing the following may convince your insurer that you’re responsible and may result in a lower premium:
- Use “smart” alarms and home sensors – Newer security systems can send your smartphone notifications about suspicious activity or the triggering of smoke or carbon monoxide detectors. This gives you the power to take action like calling the police or fire department and give them specific reasons for your concern.
- Discourage intruders – The best way to prevent break-ins is to appear to be at home. Turn lights on and off with a timer, have the post office hold or forward your mail, and hire a landscaper to maintain your lawn and exterior parts of the home.
- Shut off hazardous utilities – Consider shutting off the gas and water. Gas leaks and broken pipes are common problems that can turn into dangerous situations if not dealt with quickly.
- Regularly inspect the home – If you are geographically close to the vacant property, make a point to visit periodically to look for damage and perform maintenance. If this is not feasible for you, consider hiring a property manager.
- Hire a housesitter – One way to keep your vacant home occupied is to pay someone to live there. Keep in mind though that your insurance company may still require you to have extra coverage because this is not a true rental situation.
- Inform your neighbors – Your neighbors can be an extra set of eyes and ears on your home. Let them know how long you’ll be gone and if there are any people who are authorized to enter your home in your absence.
What are my home insurance options?
As soon as you know that your home will be vacant for an extended period of time contact your agent who can review your options with you. They may come up with the following suggestions:
Endorsement to your current policy
With this option, you buy additional coverage to your existing policy for specified lengths of time (90 days, 180 days, etc.). Endorsements are most appropriate when you are temporarily out of your home, like during a renovation or temporary work relocation.
Buying a new vacancy policy
Many insurance companies offer policies that are specifically for vacant or unoccupied homes. They are often more expensive than typical homeowners policies but can easily be canceled and prorated when you no longer need it. This policy can be used with homes for sale when the owner has moved.
Endorsement to a landlord policy
Your insurance company may offer you some leeway for a rental property if you already have tenants who have signed a lease but just haven’t moved in yet. The more guaranteed option is to add an endorsement to your landlord policy until the unit is rented again.