Life can be extremely unpredictable, and sometimes, our properties are left vacant or unoccupied due to various (yet unavoidable) reasons. Whether it’s a vacation home you haven’t visited in a while, an investment property you own that doesn’t yet have a tenant, or your main residence that has been unused for an extended period due to work or personal reasons, understanding the nuances of vacant or unoccupied insurance is crucial.
In this blog, we’ll discuss the differences between standard homeowners’ insurance and vacant or unoccupied insurance, shedding light on why it’s important to have the right coverage for unexpected or long-term vacancies.
What is Vacant or Unoccupied Property Insurance?
Vacant vs Unoccupied
Although vacant insurance and unoccupied insurance may sound the same, there are distinct differences between the two. Vacant insurance is for properties that are completely empty, and have no furniture, appliances, or occupants of any sort. Meanwhile, unoccupied insurance is for properties that contain furniture and utilities, but no one is currently living there. It implies that the owner can return to the property and continue living at any time.
Vacant insurance is typically not included in your standard homeowner’s insurance policy and needs to be purchased separately. This is because standard homeowners’ insurance policies are designed to only cover occupied homes where you live full-time or have regular occupancy.
Unoccupied insurance, meanwhile, is sometimes partially covered by standard homeowners’ insurance. (Always double-check your policy to make sure it’s included before leaving your property unoccupied!) You may be required to notify the insurer if you plan to leave it unoccupied for an extended period of time. For the most part, insurance will stop covering your home after it’s not lived in anywhere from 30 to 60 days. After that point, it’s up to you to purchase extra unoccupied insurance.
| Examples of Vacant Property | Examples of Unoccupied Property |
| • Properties for sale • Properties under construction • Abandoned properties | • Seasonal vacation home • Property is empty due to extended travel • An inherited home yet to be moved into |
How Much Personal Property Determines It as Unoccupied and Not Vacant?
In order to determine your property as unoccupied and not vacant, there should be a decent amount of functioning appliances and common household items left on the premises. These items could include things such as microwaves, refrigerators, cooking utensils, toiletries, and basic furniture.
If a property is truly empty, such as in a vacation house or a primary residence where the owner is away for an extended period of time, standard coverage remains in effect.
Differences Between Standard Property Insurance and Vacant or Unoccupied Property Insurance
Standard property insurance is vastly different from vacant or unoccupied insurance due to the unique needs and risks of vacant or unoccupied property. Some key differences include:
Coverage Limitations
Most standard homeowners’ policies have provisions limiting or even excluding coverage if your property remains vacant for an extended period. (As mentioned, this is usually 30-60 days.) Vacant or unoccupied insurance, on the other hand, is tailored to cover the specific risks associated with empty properties.
Vandalism and Theft
Vacant or unoccupied properties are more susceptible to break-ins, vandalism, and theft. Vacant property insurance typically provides better coverage for these risks, ensuring you’re protected in case the worst happens.
Maintenance Requirements
Insurance providers often impose maintenance requirements for vacant properties, such as regular inspections, utility maintenance, and secure boarding. Failing to meet these conditions may result in a denial of claims.
Why Vacant or Unoccupied Insurance Matters
Vacant or unoccupied insurance is vital for property owners facing situations where their homes or properties remain empty for extended periods. While standard homeowners’ insurance provides essential coverage when you occupy your property regularly, it often falls short when your property becomes vacant or unoccupied. Here are several reasons why securing vacant or unoccupied insurance is crucial:
- Protection from Unique Risks: Vacant or unoccupied properties are more vulnerable to specific risks that aren’t typically covered by standard policies. Vacant property insurance is specifically designed to address these unique risks, providing you with comprehensive coverage.
- Legal Obligations: Depending on your location and mortgage agreement, you may be legally required to maintain insurance coverage on your vacant property. Failing to do so could result in penalties or even the acceleration of your mortgage, requiring you to pay off the loan immediately.
- Preventing Financial Strain: Without proper insurance, any damages or liabilities arising from your vacant property could lead to substantial out-of-pocket expenses. For example, did you know that vacant properties are 40% more likely to experience fire damage, whether it’s due to arson or poor maintenance? Vacant property insurance can help you avoid unexpected financial strain during periods of non-occupancy.
- Peace of Mind: Knowing that your vacant property is adequately insured brings peace of mind. You won’t have to worry about unexpected expenses that can arise from damage or theft.
Should You Pretend Your Property is Occupied to Save Money?
As previously mentioned, vacant or unoccupied insurance is typically not included in your standard homeowner’s policy and will need to be purchased separately. Some insurance companies may not even offer coverage for your vacant property, and if they do, it typically costs 1.5 to 3 times more than standard insurance.
So, all these things considered, should you save yourself the headache and try to make your vacant appear occupied when it’s actually not? The answer is no, you should never try to make your vacant home appear occupied. Any short-term savings on premiums will not matter if your insurance claim ends up being denied or your policy is not renewed due to the insurance company discovering the deception.
It’s important to always be honest and transparent with the insurance company to ensure that you have the necessary coverage. Any missteps on your part will only give them an opportunity to withhold a future settlement payment. (And trust us, they want to withhold it!)
Public Adjusters Are Here to Help
Navigating the world of insurance can be challenging, especially when dealing with specialized policies like vacant or unoccupied insurance. Luckily, you don’t have to handle it all by yourself. Public adjusters are experts in insurance claims—they understand the nuances of different policies and can help you make sure you have the right coverage for your vacant or unoccupied property.
Here at Fortitude Public Adjusters, we understand the emotional and physical stress that comes with the nuances of property ownership and insurance. When you hire us, we’re on your side throughout the entire process, protecting you and your investments. When in doubt, contact us for a free consultation!
