Insuring Homes when ‘not in use’ can be quite a task

Insuring your home might not be mandatory as auto insurance is or as health insurance is going to be from 2014. Yet, every homeowner knows how safe it is to have insurance protection for their dwellings. However, if you don’t intend to live in the home that you want to be covered, the insurers might take a step back. Home insurers usually try to avoid offering insurance protection for unoccupied homes.

When is a home considered as ‘vacant’?

The insurance policies usually specify when the properties can be termed as unoccupied or vacant. Read along to know more about vacant homes.

1. Most home insurance policies state that a home will be considered vacant, if it’s left unoccupied for a period of 30 to 60 days or more.
2. A home is termed ‘vacant’ by the courts, if the doesn’t have adequate furniture (contents) for an individual to live there. Thereby, if a home doesn’t have bed, kitchen appliances, furnishings, tables and chairs etc. it might be considered as uninhabited.
3. Properties that are undergoing refurbishment or renovation are often left unoccupied, since they are not lived in, and might be regarded as vacant.
4. The second homes are often considered vacant, since they are not frequently visited or used.
5. Home insurers might also consider a home ‘vacant’, if the resident goes out for an extended vacation or business trip.
6. Homes ‘for sale’ or ‘for rent’ are also allowed coverage as a vacant property.

Why insuring a vacant home needs extra effort?

Vacant homes are considered to involve high-risks. Insurers try to avoid offering coverage for vacant homes for the following reasons:

1. Vacant homes are more prone to thefts and burglaries.
2. Vacant houses might turn into a den for the local criminals.
3. Several third party liability issues may also arise for vacant homes.
4. The conditions of the vacant homes deteriorate if those are neglected and not maintained.
5. The property value diminishes due to negligence and deterioration.
6. There lies an increased risk from fire damage or flooding due to burst pipes etc. in a vacant home.

How insurance coverage works for vacant homes?

1. The insurers might cancel your existing homeowner’s insurance policy, if your home is left vacant or unoccupied for prolonged period.
2. The home owners would need to inform their insurers if the insured property is left vacant for an extended time period. If property damage or liability claims are forwarded to the insurer by any third party and it’s found out that the property had been unoccupied when the mishap happened, coverage will be denied and the homeowner might even be accused of insurance fraud.
3. However, most home insurance policies have exclusions for ‘neglect’ or ‘property abandonment’ mentioned in them. The exclusions come into effect after the property has been left unoccupied for a specific time period. Certain forms of damages are thereby not covered like vandalism, theft, glass breakage, water damage from frozen pipes etc.
4. Endorsements are available which can be added to the existing home insurance policies. With the help of such endorsements, property coverage against vandalism, malicious mischief might be included along with additional liability protection and content coverage against named perils.
5. Endorsements might not be offered by all insurers. In that case, a separate vacant home insurance has to be bought by the homeowner. The coverage offered by a vacant home insurance policy is supposedly more restricted than standard home insurance policies. Home insurance coverage for all-risks will be more expensive for vacant properties.

The way out for the homeowner

Instead of leaving it unattended, you can arrange someone to ‘check on’ your vacant home regularly. Access might be given to family members, friends or neighbors so that they can stay in your home, while you’re away. A homeowner can even ‘stage’ the furnishings, the driveway etc. in the home so that it’ll not seem unoccupied not only to the insurers but also to the thieves or burglars. A care-taker or a home-sitter might be hired to look after the property in the homeowner’s absence.