What is Vacant or Unoccupied Property Insurance & Why Does it Matter?

differences in vacant vs unoccupied insurance

Life can be extremely unpredictable, and sometimes, our properties are left vacant or unoccupied due to various reasons. Whether it’s a vacation home, an investment property between tenants, or an extended absence 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 those unexpected or long-term vacancies. 

The Crucial Differences

vacant vs unoccupied insurance

Standard homeowners’ insurance policies are designed to cover occupied homes, where you live full-time or have regular occupancy. When a property becomes vacant or unoccupied, the risk profile changes significantly, and this is where vacant or unoccupied insurance comes into play. Here are the key differences:

  • Coverage Limitations: Most standard homeowners’ policies have provisions limiting or even excluding coverage if your property remains vacant for an extended period, 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 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.

It is also important to note that, even though “vacant” and “unoccupied” are normally synonymous, there are distinct differences when it comes to insurance coverage. In general, property laws define vacant as “completely empty”, meaning an absence of people and personal belongings. The term “unoccupied” refers to a property that has been left in a condition where personal belongings and items remain in the property as if the owners could return at any time. 

Why Vacant or Unoccupied Insurance Matters

unexpected risks with vacant or unoccupied properties

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. These risks may include vandalism, theft, squatters, or damage from lack of maintenance. 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. 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.

How Much Personal Property Determines it as Unoccupied and Not Vacant?

There should be a decent amount of functioning appliances and common household items left in the property to determine it as unoccupied. These items could include, microwaves, refrigerators, cooking utensils, toiletries, and basic furniture. If a property is truly empty, 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.

Should You Pretend Your Property is Occupied to Save Money?

Insuring a vacant home is more challenging and costly as it typically requires an endorsement or a separate policy, depending on the insurance provider. While some insurers may not offer coverage for vacant properties, if available, the insurance costs for such homes are usually one-and-a-half to three times higher compared to the standard insurance for occupied properties.

So should you pretend to make your vacant property appear occupied? No, it is important to never try to make your vacant home appear occupied. Any short-term savings on premiums will not matter if your insurance claim is denied or your policy is not renewed due to deception. Always be honest and transparent with the insurance company to ensure that you have the necessary coverage.

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. Here’s where a public adjuster company comes in. 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.

If you need to file a claim, need help documenting damage or losses, or simply need an extra set of eyes reviewing your insurance policy, a public adjuster can guide you through the process, ensuring you receive the maximum compensation you’re entitled to.

Here at Fortitude Public Adjusters understand the emotional and physical stress that comes with property ownership and insurance. When you hire us, we’re on your side throughout the entire process, protecting you. Contact us today for a free consultation!

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