What is the difference between vacant house insurance & regular homeowners's insurance?
Vacant home insurance is more expensive.
One of the main reasons it is more expensive is due to the liability exposure-a vacant home is basically a sitting duck for squatters/homeless, vandals/thieves or kids that are "exploring" and end up being hurt and suing the homeowner. Most of these exposures are unlikely to happen when a house is occupied.
Another important reason for a higher premium is since the home is unoccupied, it is at higher risk for a potential claim like a pipe burst which would cause extensive damage if no one found it for some time.
Two very important things people should know about vacant house insurance policies are:
- Usually they are only offered on a DP1 form (Basic Form) and ACV (actual Cash Value)
- Very few insurers will offer Vacant Coverage and if they do there will be specific exclusions
Do you have any horror stories?
There are two that come to mind.
There was a homeowner who had a vacant home and a vandal came in and stole everything except the walls and left the water running. It was a horrible situation.
Another homeowner thought his home was being rented. However, the tenants just deciced to move out withouth telling the owner/landlord. Squatters moved in and had a meth lab running in the home, with those types of drugs, the home had to be completely renovated.
Can I use regular homeowner’s insurance on a vacant house?
Some insurance carriers offer a "vacant window" meaning a property is still considered a rental as long as the property owner finds a tenant within 30, 60, or 90 days. Same with a homeowner's policy, they usually have 30 days to occupy the home (to give time for escrow to close, etc.).
Thank you to Vineyard Insurance for answering our questions on vacant home insurance. We will be providing Q & A with many professionals in our network with the goal of educating you the homeowner. Stay current with our blogs by joining our blog list.