Every once in a while, homeowners may have a vacant property on their hands for an extended time. It may be waiting to be sold, undergoing renovations or closed during certain seasons, or other circumstances could be keeping it vacant.

Whatever the reason, it’s a good idea to take out an insurance policy to cover your vacant home, as standard homeowners insurance doesn’t cover some aspects and conditions of unoccupied properties. Here’s a closer look at vacant home insurance, why it’s important and how to line up a policy. 

What Is Vacant Home Insurance?

Vacant home insurance protects properties that are unoccupied for extended periods, typically at least 30 or 60 days. Any kind of home, including single-family houses, condominiums, townhouses and multiplexes, can be covered in a vacant home insurance policy as long as the dwelling is entirely vacant.

Properties left uninhabited or untended are often exposed to several risks occupied homes don’t face as often. Wear and tear, weather damage, water leaks and other adverse conditions can cause harm or lead to rapid deterioration. Vacant homes have these vulnerabilities because they’re left unattended for so long.

Most insurance carriers offer vacant home insurance separate from standard coverage. However, insurers rarely offer it as part of regular homeowners insurance, meaning you’ll have to start a new policy to cover vacant homes.

You can expect to pay substantially more for vacant home coverage — it’s usually about 50% more expensive than a normal homeowners’ policy.

Vacant Property vs. Homeowners’ Insurance

A standard homeowners insurance policy only covers vacant property up to a certain point, usually 30 or 60 days after the home is vacated. Vacant home insurance is designed to cover unoccupied homes over an extended time.

Although most homeowners insurance policies cover criminal damages like theft and vandalism, they only provide insurance for 30 to 60 days until the predefined limits kick in. By contrast, vacant home insurance offers long-term coverage for damages from these sorts of crimes.

Vacant Property vs. Vacation Home Insurance

Vacant property insurance is similar to vacation home insurance in many ways. Both types of insurance cover damage when the homes are unoccupied. However, vacation homes incur less risk because they’re occasionally occupied by guests.

Vacation home insurance only offers intermittent coverage for the time the building is empty, while vacant home coverage is for properties that will be continually unoccupied for a long time.

When Do You Need Unoccupied Property Insurance?

If you know your property will likely remain vacant for at least a month or two, it may be wise to shop around for unoccupied property insurance. As mentioned, standard homeowners’ policies provide vacancy coverage for only 30 to 60 days. You’ll need a separate vacant home policy for coverage during longer periods.

Some life events can lead to a home being unoccupied for an extended time; if you’re aware that such events are in your future, you should consider vacant home insurance right away.

Common scenarios include:

• Extended home renovation or remodeling
• Settling new ownership in an inherited home
• Waiting for a new home purchase to close
• Navigating a sluggish or slow real estate market
• Traveling or relocating to another area for an extended period

If you anticipate any of these events, look into vacant home insurance before finalizing your plans.

Benefits of Getting an Insurance Policy

The following are some of the advantages a vacant home insurance policy can confer.

Expanded Coverage

Standard homeowners insurance policies limit or exclude coverage for periods of inoccupancy. If your home remains unoccupied for too long, your insurance company may cancel your coverage. A dedicated unoccupied home policy will cover a longer period, filling the coverage gaps standard insurance policies leave.

Liability Coverage

As slim as the chances may be, someone could injure themselves on your vacant property. For example, a neighbor or passerby might slip and fall on debris while walking on your driveway. You can protect yourself by getting optional liability coverage on your vacant property.

Financial Security

Vacant home insurance can limit your out-of-pocket expenses for harm resulting from the elements, criminal acts, water damage, fire and more. Insurance can also protect your unoccupied property when renovations are ongoing.

Reassurance

Knowing your property and belongings are covered even when no one is there can help relieve anxiety and put you at ease. 

What Does Vacant Home Insurance Cover?

Depending on your coverage, a vacant home insurance policy can safeguard your unoccupied property from some or all of the following conditions.

Natural Disasters

Vacant home insurance can protect your home against fire, lightning, hailstones, windstorms and volcanic eruptions.

Criminal Activity

You can cover damages arising from theft, vandalism, illegal squatting, arson, break-ins, drug manufacturing and other crimes that frequently take place in vacant buildings.

Weather Damage

Unoccupied home insurance can cover damage from weather events that are out of your control. Such damage can include frozen pipes, roof leaks during rainstorms, wind-blown debris, collapses under the weight of snow and other meteorological calamities.

Related Expenses

Depending on the extent of your policy, vacant home insurance can help defray certain expenses involving your property. For instance, it might cover temporary housing while you’re awaiting repairs, food that spoils during a blackout, fees collected from loss adjusters, fines for code validations and other losses. 

How Much Is Vacant Home Insurance?

The total cost of taking out vacant home insurance hinges on several factors and conditions, including:

• Property location
• Length of vacancy
• Property value
• Amount of deductibles
• Selected coverage

On average, a vacant home insurance policy will cost 50%–60% more than a standard home policy. Talk to your bank’s account manager and insurance agency about your particular property for a more accurate estimate.

How to Apply for Unoccupied Home Insurance

Here’s a step-by-step guide to applying for a vacant home insurance policy.

1. Collect the Relevant Information

Gather the key details relating to the property you want to cover, including its address, square footage and listed value, as well as the length of the pending vacancy.

2. Review Your Contract Options

If applicable, call your current homeowners’ insurance policy provider. It may offer vacant home coverage as an add-on to your standard policy.

3. Compare Quotes

If you decide to pursue coverage with other carriers, get as many quotes and estimates as possible and ask lots of questions. Policy providers will likely have some questions for you in return — make it a point to answer them honestly. When they submit their quotes, study the details and conditions carefully.

4. Select a Policy

Choose the policy that best suits your needs and budget. Once you’ve made your selection, go over the application with a fine-toothed comb before you finalize the deal.

5. Pay Your Premium

Finally, make your initial premium payment to activate your coverage. Keep all documentation related to your policy, including informative documents, confirmation records and overviews of the claims process.

Note that your account premium may be adjustable, especially if you have a positive claims history or can bundle coverage with another insurance plan. Don’t hesitate to negotiate your final premium price if your provider allows it.

Choose the Best Vacant Home Insurance From Benzinga's Top Providers

Here’s a helpful table comparing the top vacant home insurance plans and companies according to Benzinga’s experts:

Protect Your Real Estate Investments With Vacant Home Insurance

Vacant homes need protection from normal wear and tear. They’re also more vulnerable to risk because they’re so rarely looked after. Consider obtaining a vacant home insurance policy from a trustworthy broker to keep your unoccupied home safe and secure between stays or tenants.

Frequently Asked Questions