Unoccupied Property Insurance: When Do You Need It?
Unoccupied property insurance is a must in today’s world if you are serious about protecting your property through a variety of common circumstances that specifically cover the occasions when your property may not be occupied. Don’t confuse unoccupied property insurance with vacant property insurance. A vacant property is considered one in which there are no possessions pertaining to activity or occupancy and the property is not in use. This is different than an “unoccupied” property where the property is simply idle with the intent of using it.
Many insurance agents talk about the two terms as if they are the same. But make sure the policy you are issued contains the coverage you need, based on your actual circumstances.
As a rule of thumb, unoccupied property presents a far greater risk to an insurer, so you should expect that regular home insurance will not be sufficient to effectively cover extended periods when the property is unoccupied. The accepted rationale behind this, is that an unoccupied property has no-one available to protect it and therefore is at greater risk of being exposed to damage. This is why the insurance industry created the unoccupied property insurance policies.
Vacations
Going on vacation is the most common reason for your home being unoccupied. If you are not sure of the scope of your existing home insurance, it is worth checking the time period for which you will remain covered. This is because home insurance can become void (for vandalism for example) in as little as 30 days. With many people taking extended vacations to avoid winter weather, periods of vacancy can extend to 60 and sometimes 90 days. Often you can add an unoccupied property insurance rider to your existing homeowner’s policy if you are going on an extended vacation.
Property Rentals
If your rental property or properties remain unoccupied between tenancies, unoccupied property insurance is required. Most insurers offer 30, 60, and 90 day options to cater for this contingency so that your property portfolio need not be compromised. Also, should the family home or a rental property find it’s way onto the ‘for sale’ market, the same situation applies. If the property is unoccupied, it at risk.
Home Insurance vs Unoccupied Property Insurance.
There is a huge difference between between regular home insurance and unoccupied property insurance, partly because they are insuring for different contingencies. The other key difference to recognise, is in terms of the risk. Because the risk of damage to unoccupied property is far greater than for occupied property, the cost of unoccupied property insurance is more expensive. However, when weighed against the expense of losing a property and not being insured, most property owners recognize that it is far more advisable to be insured than not.
Check With Your Insurer
It pays to discuss these things with your insurer because it is likely that several options may be available to ensure the best deal for you and your property. Sometimes, it may be necessary to cancel the home insurance policy and take out a specific unoccupied property insurance option, whereas other insurers may be happy to accommodate the additional policy in conjunction with the existing home policy. For multiple rental properties, an insurer may be able to offer a discount for multiple unoccupied property insurance policies. The key to good insurance is to clearly identify what you need and find an insurer who can not only provide it, but offer alternative options depending on changing circumstances.
At the end of the day, it is also worth checking out any penalty provisions, if you need to terminate the unoccupied property insurance policy. For example, your property may become tenanted in three weeks when you were expecting it to be vacant for twelve weeks. Conversely, you wouldn’t want a twelve month policy when you know you only need eight weeks. So when considering unoccupied property insurance, finding an insurer who understands and is able to meet your changing needs, will always be a wise move.
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47 Responses to Unoccupied Property Insurance: When Do You Need It?
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Thanks. I was unaware that staying away from home for more than 30 days at one time could void my homeowners insurance.
Chang
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It depends on the written/verbal agreement between the owner and the occupant. It all depends on the situation and concerns, but this could be apply somehow.
Actually it depends on what the insurance company policy states. And most homeowner insurance policies require the homeowner to live in the property and do not allow the property to be empty for more than thirty days at a time.
Admin
I never dreamed I would need unoccupied property insurance since I always have homeowners insurance. But we often take 6 week vacations in the summer to visit our grandchildren. So thanks to you I now know I need to talk to my insurance agent before we leave this year to ensure our home is protected while we are gone.
Gene
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I wasn’t aware that if I’m not at Home longer that 30 days, then I need unoccupied property insurance which of course is more expensive than standard insurance. Insurance companies will always find a way to charge more and put more money in their pockets.
I’ll be travelling this summer, and it looks as if I’ll need this. Hopefully they can cover for periods longer than 90 days in a reasonable manner. Going to have to look into more information on this before I leave. Any idea if going with a different carrier then your main homeowners, would cause any issues?
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I suggest make your house strong and protected.
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I’m not aware too if I’m not at home longer than few weeks, then I need unoccupied property insurance… IMO we don’t need it.
Your choice. But it might cost you a lot of money since it is not your opinion that counts but the language of your home owner policy.
Thank you for this info! It really saved me. Well, I need to reconsider my vacation now
If you own a home and there is nobody living there or you’re away for long periods of time, you may want to consider paying for unoccupied insurance. It is better to be safe than sorry because your risk is higher.
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nice idea for keeping the house safe . i am out of my house for almost 30 to 40 days the tips are really useful for me
leave the house for long time specially on vacation is common reason for your house being unoccupied
even in Saudi Arabia that is the common reason for unoccupied property insurance.
Is unoccupied property insurance a separate policy or is it part of a home policy that one would already have? I cannot say I am completely surprised that I have never heard of this type of policy before. It seems that most insurance companies will have these types of sub policies that consumers do not know are necessary for something so common as a vacation. Thank you for bringing this up and I will definitely be looking into it for the next long term vacation that I plan.
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Most policies will cover you if you are away less than 30 days on a vacation or other reason for the property being unoccupied. However you should check with your insurance agent to be sure.
It is not part of the standard homeowner’s policy. Some insurance companies will allow you to add it as a rider to your homeowner’s policy, some will not. If you can’t add it to your standard policy you will need to buy a new policy.
It is more expensive than standard homeowner’s policy since your property is at greater risk if nobody is occupying it to catch minor problems before they become major or to keep the property safe from vandalism or other senseless destruction. And yes, since there is greater risk, the insurance companies charge more for it.
I even knew the difference between vacant and unoccupied property insurcance, I wonder if insurance agents know this and pretend not to know or if they ignore it completely.
My agent was not aware of the 30 rule for homeowner’s insurance but the real estate agent who lived next door to me was aware of it.
She warned me of the need when she learnt we were going overseas for an extended vacation. After doing research I ended up creating this web site as I suspected many were not aware of this need.
When it comes to home insurance, one has to know what their policy covers and doesn’t cover. The insurance company is looking out for their best interest, not yours.
This is an excellent article that all homeowners should read. Another thing all homeowners should read is the terms and conditions on their insurance. Most people do not read these until it is too late – many insurance companies actually hire experts with the specific task of finding holes in policies so payments can be withheld. It is very scary to think an extended holiday can indeed void your policy. Thanks for sharing!
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Very interesting. I guess I was lucky that nothing happened to my home last summer when I was out of country for six weeks. I had my neighbors keeping an eye on my property, picking up the circulars that get thrown out all the time and feeding my fish every day.
So the house was watched but nothing was home during that period.
Ed
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I was totally unaware of this type of insurance, but reading this it makes perfect sense. Now that I think about it I have taken risks in the past. I will look to sort out my insurance now. There are so many things that can go wrong when you buy a house, I sometimes just try and block it out! Thanks for sharing
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I stronly believe that insurance is really important nowadays for any property. It just provides some kind of security to any property.
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My wife and I have a couple rental properties, but never considered the value of unoccupied property insurance and how it may save us some headaches when we don’t have tenants that are currently living in the spaces. I’ll also send this to my parents who are returning from Florida next weekend after being gone since December to escape the winter up here. Thanks.
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This all must be relevant to the USA because in Australia its different.
Yes, this concerns the U.S. However I understand that the U.K is similar but since I don’t live there I haven’t checked into it.
However, regardless of where you live, it is a good idea to check into it so you know exactly what your homeowner insurance policy covers and the limitations on the coverage.
The only problem is applying for insurance for an unoccupied house can be quite a difficult task seeing that our houses are vacant. The reasons as to why a house maybe empty are endless.Most companies will not provide cover for an empty house and if we found unoccupied insurance policy for our houses, then we can expect to be paying a bit more than normal
Yes, many companies will not issue the policy and when they do, it is more expensive. But it is cheaper than having a fire while you are gone and returning to find your insurance company will not pay because you were away for six weeks.
Why would an insurance company not issue a policy for an unoccupied residence? Is it simply the risk involved or is there something else that goes into it? It seems to me that this would be a necessary part of a homeowners policy for any type of second or vacation home. Do those qualify for this type of insurance or is it only for a primary residence? This is an interesting topic that I have not considered before but I’m sure those that have summer and winter homes should be educated on this topic.
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The likelihood of damage to an unoccupied home is much greater than to a home where the owner is living in the home. For example, if a water pipe freezes and breaks in an unoccupied home it can cause extensive damage to the walls, floors and other parts of the home before it is discovered. If the owner is at home when the pipe bursts, the damaged is limited by the immediate actions of the home owner.
Also vandals are more likely to break into an unoccupied home to steal appliances and other valuables than an occupied home. They are also more likely to do extensive damage to walls, etc, if there is no risk of the home owner returning to catch them in the act.
So unoccupied homes are more risky to the insurance companies and many do not wish to take this additional risk. Those that do charge higher premiums for the unoccupied property insurance but even at the higher rates it is better to have your property protected by the insurance.
It is rare that normal homeowner insurance covers property that is vacant for more than 30 days during one period. So it is wise to talk with your insurance agent before you leave on an extended vacation.
Hello, This is a very informative article. i had no idea about the difference in vacant and unoccupied properties and the scope of insurance relating to these two terms. Thanks for keeping us informed with such great articles. I like this blog!
But how will insurance company even know that we have left our house for more than 30 days ?
Do we have to prove that we were present and if yes how ?
Your next door neighbor is mad at you because your teens wake him every night coming in after midnight, banging doors and playing the drums in your garage on week-ends.
Somebody tells them or the amount of damage is high so they have an insurance investigator check on the claim.
I assume they would need to prove their case but I really don’t know. The risk is too great for me to assume so now that I know about this I will ensure I am properly insured the next time I take an extended vacation.
Yes, I agree that unoccupied homes face greater insurance risks, but you MUST talk to your agent to get a full understanding of the costs, liabilities, and options you have when purchasing unoccupied property insurance.
Agree Totally. Talk to your agent and then talk to a rival agent to ensure you are receiving full information AND the best price.
Thanks for the information. I found you through SmugGecko’s site. I didn’t know anything about property insurance until reading this!
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Great information. I was not aware I needed a different insurance when I went on an extended vacation.
I have an apartment in south-east London and I am thinking about moving out for 2 months during the Olympic Games this summer. The flat is only 10 minutes from the site and I think I could rent it by the week to people visiting for the games. Could you advise me on which of these policies I would need to get to cover me for this please? I will be away from the house but it will be occupied by holiday tenants. I find all of this very confusing..thanks for your help!
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I’m in the U.S, so the laws are probably different. I would advise checking with several of the larger insurance companies in your area to receive a valid answer as well as price quotes.
I have rental property here in the U.S.. I can not use the standard homeowner’s policy for this rental home but must have a homeowner policy that does not include any contents in the home. It costs me almost $300 per year more for this coverage than the standard homeowner’s policy, even through the insurance company is not insuring any contents on the property.
I use a rental management company to handle my rental home. They know the laws that govern rental property and they also handle the headaches of dealing with tenants. So unless you are an expert at rental property, and it doesn’t sound as if you are, I strongly recommend you get a management company to handle the rental for you.
You will not net as much but you won’t have the headaches of dealing with renters. Nor will you be stuck holding the bag if something unexpected occurred during the rental period.
Another thing you need to consider is your lease if you do not own the apartment you are considering renting. Many leases forbid sub-leasing so you may not be able to legally rent the apartment during this period. I know my lease forbids sub-leasing on the part of my tenants and also restricts the number of adults and children that can occupy the property.
A final note. My brother-in-law did the same thing when the Olympic were in Atlanta a few years back. He ended up with his home trashed and his insurance company refused to pay any of the repairs. So be careful.
Chang
Very informative article on property insurance! I was not aware of an insurance covering unoccupied property and also that If I stay away from my home for more than a month then my home insurance because void. I’m not sure of that though. I’ve to check with my insurance company on that.
Sorry if someone asked this, is unoccupied property insurance more expensive since you don’t have anyone at the house to protect it? And can you get it for a few weeks or an odd number like 10 days? Going on vacation soon and the neighborhood activity has been suspect lately.
Yes, it is more expensive due to nobody living in the house to catch problems when they occur.
But if you are going to be gone for 30 days or less you do not need this. Your normal homeowner insurance will cover it.
unoccupied property insurance is one great idea. But it has his cost
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I wish I had this. I inherited a house but didn’t have the money needed to renovate it so it was left empty for some time until I could arrange the finances to get the work done. The house wasn’t local to me, it was a few hundred miles away. I went up to survey the house once the finances were in place and found it full of squatters! They’d ruined the place, tore up the carpets, let their dogs foul the place and even started a few small fires! To add insult to injury I then had to go through the courts and serve an eviction order to get them out of there!
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Will unoccupied property insurance cover those instances when you’ve been burglarized during the state of un-occupancy?
Great information. My husband and I often take extended vacations to visit our grandkids. I did not realize my homeowner’s insurance might not cover our home while we were gone.
I am going to talk with my insurance agent about this and see if they offer a rider for the periods where we will be gone for more than 30 days.
Jill
Excellent article. I had never heard of this so I called my insurance agent and asked her about it. She stated that while most insurance companies would probably honor the policy if you were gone for a few days beyond thirty days, they were not required to. She stated that most agents don’t mention this because few people are gone for more than thirty days and most companies don’t offer coverage as a rider to the homeowner policy. So the agent doesn’t mention it since it doesn’t impact many people.
She stated my company does not offer a rider but she could place it with another company if I gave her a week or so notice.
So thanks for bringing this to my attention before something happened.
Gene