One of the most exciting moments in a person’s life is to find the home of their dreams. Unfortunately, things can get a bit complicated if after buying it, your soon-to-be renovated dream home sits across town or across the country empty and vulnerable to anyone or anything that might aim to do it harm.
When a person buys a home, purchasing the right home insurance isn’t usually near the top of the priority list. While the lender will require home insurance be in place for the closing, even they might overlook details that could spell disaster should you have a loss.
Insurance companies are fine covering an occupied home, for them it’s a pretty safe bet. But what happens when you don’t live in your home, or don’t live there full time during a renovation? Here’re some reasons why you may find yourself in the market for vacant home insurance.
Vacant Home vs. Unoccupied Home
The terms “vacant” and “unoccupied” sound like the same thing, but there are important differences that can make a big difference when a homeowner is trying to insure their property. Perhaps the simplest way to explain the difference is that with an unoccupied home, no one lives there. With a vacant home, no one can.
The courts consider a home to be vacant if there is not a “reasonable” amount of furniture included in order for it to be lived in. This means it needs to have kitchen appliances, a bed to sleep on, a table and chairs, and another place to sit.
It is important to know when a home is considered “vacant” because many homeowners insurance policies have a provision included that allows them to deny a claim, because the impression is that the homeowner has abandoned the home. An unoccupied home however, still has furniture and is ready for someone to live there at any time. Since it looks as if someone may walk in the door at any time, it is seen as less of a magnet for vandals and thieves, or even the elements of nature, including pest problems.
When Does a Home Need Vacant Home Insurance?
Vacant home insurance is something that is available separate from a regular homeowners insurance policy. It is a good idea to get this type of policy if:
They Have Moved to a New Home
When a person buys a new home but does not sell their previous home right away, it may become necessary to carry vacant home insurance on the unoccupied or vacant home. Their old home may take a while to sell and be on the market without anyone living in the space.
They Own the Home Purely For Vacation Purposes
Some people own a second home, such as a cabin by the lake, that they only visit a couple times a year. Often these homes are in more remote areas and retain only minimal functionality when their owners are back at their “real” homes.
They Live in the Home Seasonally
Many people who live in the northern half of the U.S. will buy a second home in the southern half in order to escape cold winter weather. In these situations, each home is unoccupied for several months at a time. If a house is vacant between 3 months and 3 years, it may be considered vacant.
They are completing complex renovations on the home
When a house is in the midst of being torn apart and put back together again, it cannot be lived in. While things may look great in the end, vacant house insurance is needed while the process is being completed.
Risks Associated With a Vacant or Unoccupied Home
When nobody is staying in a home, it is harder to monitor those little details that are often second nature to those who are actually in the home. Some of these include:
- Frozen pipes
- Vandalism
- Theft
Finding a Tenant to Rent Your Home
If the housing market doesn’t look good to sell a vacant or unoccupied home, many people choose to rent their home out to someone else. Having people living in the home will deter criminals, and it means that someone will be there to monitor for any work that the house needs.
There are several services that help homeowners find renters for their homes. Many of them also help to make sure that renters carry renter’s insurance to take care of their personal belongings. It may also be necessary for the homeowner to carry landlord’s insurance in order to protect themselves in the event that their tenant is injured.
