A typical homeowner's insurance policy ends once the property is vacant for more than 30 days. Most homeowners don't know this. They continue to pay their premium but, if a claim is filed, it may not be paid because vacancy voids the policy.
If you leave a home vacant, you must have vacancy insurance. Premiums for this type of insurance can be more than double regular insurance. Even many landlord policies have vacancy limitations so, no matter what type of property you own, know what your policy terms are.
Insurance companies put a higher risk (and cost) on insuring vacant homes because of the increased risk of theft, vandalism, fire and water damage. These risks and costs may be higher in northern states because of potential damage due to extreme weather (frozen pipes bursting,etc.).
It may be cheaper, and safer, to keep your "for sale" home occupied. Before you or your tenant move out, take a look at your policy and talk with your insurance agent for guidance.
Some suggestions when thinking about vacant property:
- Protect your property. Install and use a monitored home security system.
- Make sure the smoke detectors are functioning.
- If your home has a sprinkler system, monitored central alarm for fire, smoke and theft and deadbolt locks, your home is safer and these features can lower your insurance premiums.
- Make the house look lived-in. Have someone bring in mail. It's always better to stop mail and other deliveries anytime you're away. Ask a neighbor to park their car in your driveway. Install timers on lights and leave window coverings and some furniture in the home.
- If possible, don't move out until you've sold the home. Perhaps someone in the family can stay behind or live there occasionally until the home is sold.
- Rent out the home. Not only will the home be lived in but the rent will help cover your carrying costs. In this case, you will need to change your homeowners insurance policy to a landlord policy but that will be cheaper than vacant home insurance.
- Hire a house-sitter or let someone you trust live there until it's sold.
- No matter what you do, you still have to keep the home maintained by cleaning the yard and gutters, trimming trees, checking for leaks, shoveling the sidewalks and driveway and winterizing as necessary.
What's been your experience with vacant houses?