Your home is probably your single largest investment and, as such, is worth protecting. Although some people purchase properties for investment purposes, most of us live in our homes year round. However there are certain times when you might be away from home for either a short or an extended period of time. Or you may have purchased a home for investment purposes as a rental property and find there are occasions when it is empty without a tenant. In these cases, you probably assume your home insurance policy will have you covered should anything happen, but will it?
The biggest issue homeowners should understand about vacant dwellings is that once a house becomes vacant you lose 3 types of insurance coverages immediately:
After a home has been vacant for 30 days, all insurance coverage ceases unless you have notified your insurance broker or insurance company.
In this article and the next we’ll share some situations and tips about leaving your home vacant or unoccupied for extended periods. If you’re not certain how these situations may apply to you, you might want to check with your Newman Insurance broker to ensure your home is adequately covered.
The first thing that homeowners need to know before leaving their houses unattended for extended periods of time is the difference between ‘unoccupied’ and ‘vacant’. Both are common terms, but when applied to home insurance, they have two entirely different meanings and types of available insurance coverage.
An unoccupied (uninhabited) home is empty of people. A vacant home is empty of people and most furniture. BUT, unoccupied homes left unoccupied and unattended for more than 30 days could be considered vacant and therefore without coverage.
You are away on a 2-week vacation, but have a neighbour checking the house on a daily basis. Thieves break in and steal your valuables. Are you covered? Absolutely. You took precautions and your home insurance policy should cover any losses.
You live alone and are hospitalized for 6 weeks. You return to discover that the furnace broke down during your absence resulting in frozen pipes and flooding. Would your current homeowners insurance cover the damage? Unless your broker was notified and you had someone regularly check in on your house during that time, you may be on the hook to cover the cost of damages yourself.
Your family has bought and moved into a new home before the closing on the sale of your old home. Your old home is empty and is considered vacant. A fire breaks out. Are you covered? It depends. You’ll be covered if the fire happens in the first 30 days after vacancy occurs or if you contacted your broker to amend the policy to vacant (and higher risk) status. But, keep in mind that such policies, known as vacancy permits, don’t usually cover vandalism, theft, glass damage and water escape.
Confused? That’s understandable. House insurance policies are intricate contracts that homeowners need to have tailored specifically for their needs. Newman Insurance account managers are experienced and committed to working with you to ensure that you are adequately covered regardless of whether your house is unoccupied or vacant.
The bottom line is that both unoccupied and vacant homes are considered higher risk. Unfortunately, they are a target for thieves and vandals, and if no one is around to monitor any potential issues (furnace breakdown, leaks, etc.), your existing policy may not cover any losses.
Thankfully, there are many precautions that homeowners can take to protect their unoccupied houses. You can learn how to secure your home and maintain your insurance coverage while you’re away in our next blog post.
As always, we’re here to help if you have any questions about the state of your home or your home insurance coverage.