You may require vacant home insurance to ensure you are covered if your unoccupied home is harmed. You may believe that vacant home insurance is less expensive than conventional homeowners insurance, despite the reality that vacant properties are riskier and more expensive to insure. When your home is unattended, such as when you are doing repairs or preparing to move in, it is more exposed to damage or vandalism.
This is because you are not present to care for it or deter intruders. Having unoccupied home insurance could help you financially if you need to file a claim. This article discusses who needs vacant home insurance, how to obtain it, and what it covers.
What is Vacant Home Insurance
Vacant home insurance is a form of specialized home insurance that protects properties that are empty or appear to be vacant. This form of policy, also known as unoccupied home insurance, can protect homeowners against financial losses caused by unexpected damage that occurs while they are away for an extended length of time.
You can get vacant home insurance alone or in addition to your existing home coverage. The insurance for an empty house is typically written as a DP-1 policy form if you buy it separately. This policy form should not be confused with either a rental property policy (DP-3) or a conventional homeowners policy (HO-3).
It’s also critical to understand the distinction between unoccupied and vacant properties. While an empty property is not in use for an extended period, residents anticipate returning to their unoccupied homes, such as seasonal residences, soon.
What Does Vacant Home Insurance Cover
The protections offered by unoccupied home insurance are intended to be similar to those of a standard homeowners insurance policy. For example, your vacant home policy may cover the following sorts of damage:
- Theft.
- Vandalism.
- Flames.
- Detonations.
- Wind.
- Hail.
- Thunderstorm.
Your insurance should provide a full description of all covered threats as well as a list of coverage exclusions. Although it does not cover everything, vacant home coverage can assist with the most frequent types of damage that may occur when a home is uninhabited.
What Does Vacant Home Insurance Not Cover
Unoccupied home plans rarely contain liability coverage, and they may not cover damage, personal property, or other structures. However, this coverage could be included as policy endorsements. Similar to how conventional homeowners insurance policies do not cover some natural catastrophes, unoccupied dwelling coverage excludes floods and earthquakes.
A separate insurance or endorsement will still be needed for coverage. See your insurance agent or check the policy terms to find out where and when certain exclusions can apply. Furthermore, unlike home insurance, which provides coverage all year, these plans may be short-term (often three months to a year).
Your coverage terminates with the policy, so any damages to a vacant home that occur after that date must be compensated out of pocket. Furthermore, some insurance providers may only cover certain types of properties for vacant home insurance. Therefore, you would need to look around for an insurer who will cover the specific types of unoccupied residences.
How Much Does Vacant Home Insurance Cost
The average premium for vacant home insurance might range from 15% to 20% more than that of a typical homeowners insurance policy. Unoccupied and deserted properties are seen as a higher risk by home insurance because no one is there to identify issues early on. For example, a resident can put out a fire before it spreads to the whole house or discourage a burglar.
Factors Influencing the Price of Vacant Home Insurance
When determining insurance rates for vacant homes, insurers may consider the following factors:
- The house’s age.
- Reason for the vacancy.
- State of the asset.
- Duration of the vacancy.
- Location.
- Being close to a fire station.
- Whether there are installed security systems.
When Do You Need Vacant Home Insurance
Vacant home insurance is typically required for any homeowner who vacates their property for more than 30 days. In addition, here is an illustration:
- You moved into a new house and left your previous one vacant while it was listed for sale.
- Your new residence has not yet been occupied.
- Until it is sold, the house you inherited is vacant.
- Renovations are presently underway on the house.
- The foreclosure on the residence is going to occur.
When a residence is declared abandoned, many insurers will revoke, reduce, or refuse to offer (standard) coverage entirely. Insurance companies are sometimes unwilling to cover abandoned homes due to the increased risk of theft, vandalism, and damage caused by frozen pipes or badly maintained equipment.
How to Get Vacant Home Insurance
Getting regular homeowners insurance is akin to getting coverage for a vacant home. Your current homeowners insurance provider may give you the option of purchasing an endorsement or standalone policy. To obtain empty house insurance, you should consider the following steps:
Identify your insurance needs
Setting up a budget and identifying your insurance priorities can be beneficial before you begin shopping for rates. For instance, if you want to manage your account online, you can choose a provider with an impressive internet presence or a business that has a lot of happy customers. If money is tight, you might want to go with the provider that offers the least expensive coverage. Shopping can be easier if you know what you’re searching for.
Shop around
To find the best vacant home insurance, search for carriers offering endorsement or standalone policies, bundling discounts, and coverage options. Expand your search to include states like Farmers, American Family, and Foremost, as not all carriers offer this form of coverage in every state.
Get quotes
To get the best quote, compare quotes from various companies and consult an agent to determine the appropriate coverage, policy limits, and discounts. Vacant property insurance can cost 50-60% more than standard homeowners insurance, so be prepared for a potentially high estimate.
Set up a policy
For your coverage to take effect, the final step is to complete an empty house policy or add the endorsement to your existing policy. Avoid a coverage gap if you are replacing your regular homeowners insurance policy with an empty homeowners insurance policy. You will receive guidance from your insurance agent on how to prevent a lapse in coverage.