Insurance companies really (really really) hate unpredictable risk.
After all, “unpredictable risk” means “claims.” And “claims” involve giving you money.
(No one likes to give away money. Not you. Not your insurance company.)
Predictability means the insurance company can charge you reasonable prices and pay their claims. But getting insurance for a vacant home often means more unpredictable risk.
Sure, there’s a natural level of risk that comes from living in a home—a neglected pot of pasta on the stove causes a fire or your toddler’s toilet antics bring on a plumbing nightmare. The insurance company knows this. So they tweak their numbers and policies to minimize their risk as much as possible.
So if living in a home causes more claims, you would think they would prefer that your home be empty, right?
As it turns out, it’s even more important to get insurance for a vacant home.
Insurance Companies HATE a Vacant Home!
Insurance companies hate unpredictable risk. And an empty home is like a giant risk magnet. They are so risky that insurance companies may even cancel your policy if they find out that the home has been vacant prior to a claim.
While it is true that living in a home comes with certain risks, you are far more likely to maintain your home and protect it from damage while you are living there.
You install a monitored alarm system and buy a Doberman to protect against theft.
You tighten the faucet so that annoying drip drip drip won’t keep you up at night.
You turn off the stove when your pasta boils over and call a plumber to fish the fidget spinner out of the toilet.
In short, you act as your home’s guardian, doing your best to prevent accidents from occurring and stepping in when they do.
An unoccupied home is not only more likely to be vandalized, it also means damage or theft could go weeks without being noticed. Sure, a vacant house means there’s no toddler to plug up the guest bathroom, but a busted water pipe could gush for weeks. Which would you rather pay for?
Is Your Property “Vacant” or “Unoccupied”?
It’s important to note that the insurance definition of vacant home is probably different from yours.
While you probably think of “vacant home” and “unoccupied home” as being interchangeable terms, your insurance company does not. In order to predict the type of risk a property is subject to, insurance companies have to draw a distinction between a home that no one is living in and one that has regular residents.
Even if you or a neighbor checks on the property regularly, in the insurance company’s eyes “no resident” equals “vacant property.”
For example, a home that has been on the market for three months after you have moved into your new home would be considered “vacant.” If you are a snowbird who has gone back to New York for the summer, your beach condo in Florida would simply be labeled “unoccupied.”
This might sound like splitting hairs to you, but it’s a big deal for your insurance company. If your insurance company determines that your home fell under their definition of “vacant” at the time of a claim (and you didn’t inform them that the property was vacant), they can raise your home insurance premium or even cancel your policy.
Insuring a Vacant Home in Florida
So is it possible to get homeowner’s insurance for a vacant home? Sure. You can get an insurance policy on just about anything. However, because vacant houses are at greater risk for insurance claims, vacant home insurance can be pricey.
Insurance rates for vacant homes can be significantly higher than a traditional home insurance policy, so it’s worth contacting your independent insurance agent for quotes from a few different companies. Because of the risk associated with insuring an empty house, vacant home insurance usually comes in two breeds: 1) great coverage, high premium and 2) crummy coverage, great premium.
Some vacant home insurance policies even require that owners of vacant homes sign a “Consent to Rate” waiver that allows them to charge a fee to account for the higher risk of the property’s vacancy.
Whatever the cost, it’s worth it to get a vacant home policy if your home meets the vacant home definition, but if your budget can’t handle it, here are some other options.
- Continue with your existing homeowner’s policy and simply accept that certain types of damage (like vandalism) won’t be covered. However, because this will mean you will have to pay out-of-pocket for any non-covered claims, make sure that you consult with your independent insurance agent to understand any and all consequences of doing this.
- If you are in good standing with your insurance company (your premiums are always paid on time and you haven’t had many claims), you can ask them if they would be willing to continue your coverage until the time of renewal.
- Purchase vacant property insurance through a reputable company.
All homes are associated with some level of risk, but vacant homes are even riskier. As much as it might pain you to buy insurance for a vacant home, it’s still necessary. If vandals break in and steal your copper plumbing or a water pipe bursts and floods the house, you don’t want to be on the hook (or have your policy cancelled).
To put your insurance company at ease, make sure your home doesn’t fit the insurance definition of vacant and/or purchase vacant property insurance to protect against your increased risk.