There’s a big difference between “vacant” and “unoccupied” homes. Most homeowners don’t know the difference. But insurance carriers do.
Keep reading to see if you need vacant home insurance and why it’s so important.
Insurance companies really hate unpredictable risk.
After all, “unpredictable risk” means “unpredictable claims.” And “unpredictable claims” make naming the right price very hard. Remember, the insurance company needs to be able to pay out to you and cover its own costs!
When risk is predictable, the insurance carrier can charge you reasonable premiums and pay out on claims. But getting insurance for a vacant home makes risk a lot more unpredictable.
Sure, there’s a natural level of risk that comes from living in a home—a neglected pan of garlic on the stove causes a fire or your toddler’s toilet antics bring on a plumbing nightmare. Your insurer knows this. So they tweak their numbers and policies to manage this risk.
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!
As risky as a home can be, a vacant home is even worse. They are so risky that insurers may even cancel your home insurance 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 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 the garlic burns 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 vacant 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 before anyone notices.
Which would you rather pay for?
Is Your Property “Vacant” or “Unoccupied”?
While most people probably think of “vacant home” and “unoccupied home” as being interchangeable terms, your insurer 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.
To some carriers, “vacant” refers to a home that is completely empty of both residents and personal property or lacks enough personal property to be livable. An “unoccupied” home, on the other hand, contains sufficient personal property for a person or persons to live comfortably.
So if a snowbird has gone back to New York for the summer but left their personal items and furniture in their Florida beach condo, it would simply be labeled “unoccupied.”
Other carriers might require a vacant home insurance policy based on how long it’s been since anyone has lived there (30 days is common).
For example, a home that has been on the market for three months after the sellers have moved into a new home would be considered “vacant.” Even if you or a neighbor checks on the property regularly, in the insurer’s eyes “no resident” equals “vacant property.”
This might sound like splitting hairs to you, but it’s a big deal for your insurance company. If they determine that your home was vacant at the time of a claim (and you didn’t inform them), your claim might not be covered or your policy could even be cancelled.
Florida Vacant Home Insurance
So is it possible to get homeowner’s insurance for a vacant home? Sure. You can get a home insurance policy on just about anything.
However, because vacant houses are at greater risk for insurance claims, a vacant home insurance policy often costs more. 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 insurance coverage, high premium and 2) crummy insurance coverage, low 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 insurance policy if your home meets the definition of “vacant,” but if your budget can’t handle it, here are some other options.
- 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 a vacant home insurance policy through a reputable company.
- You can self-insure. That means if your house burns down or blows away, your bank account is basically your insurance policy. We don’t recommend this unless you’ve consulted with your financial advisors and have drafted and funded an actual self-insurance plan.
All homes are associated with some level of risk, but vacant homes are even riskier. And 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 carrier at ease, make sure your home doesn’t fit the insurance definition of vacant and/or purchase a vacant home insurance policy to protect against your increased risk.
As independent insurance agents, Harry Levine Insurance is bound to any single insurance carrier, so we can provide you with quotes from multiple insurance companies to build a level of home coverage that is right for you.
This article was first published in September 2017 and was updated in March 2020.