(COLUMBUS) - As the U.S. housing market struggles to rebound, many homeowners have been stuck with hard-to-sell properties longer than expected. Some frustrated home sellers who must relocate for a new job opportunity, want to downsize or simply want to buy a new place have left homes empty. Unoccupied homes can leave the homeowner exposed to loss and liability that may not be covered by their insurance, according to the Ohio Department of Insurance.
“In many cases, people who have been trying to sell their homes for awhile have moved forward with their plans regardless, leaving a vacant home on the market,” said the Ohio Department of Insurance. “Having an unoccupied home can create several insurance implications that typically are not covered under a standard homeowners policy.”
The Added Risks of Vacant or Unoccupied Homes
Homeowners policies are meant to insure homes that are occupied, so they generally include exclusions for breakage of glass and vandalism or malicious mischief on a home left vacant or unoccupied for a specified number of consecutive days.
Generally, a vacant home is one the resident has moved out of and taken his/her belongings with him/her. An unoccupied home is one where the resident is not staying at the home, but the furniture and other belongings remain.
Because vacant and unoccupied homes pose a higher risk for damage than occupied homes, insurance companies insure these properties differently and usually at a higher price. These risks include:
- Break-ins: When a home has been unoccupied for awhile, it can show signs that nobody is around - unkempt lawn, full mailbox, no lights on - that can tip off burglars to an easy target.
- No emergency response: Without anyone home to call 911 or respond to emergencies, a manageable problem - such as a small electrical fire - can turn into a much larger, more costly disaster.
- Property liability: There is no one present to prevent others from entering the property or to supervise activity, which could increase the likeliness of an accident on the premises or property damage when the owner is not there.
Keeping Your Vacant or Unoccupied Home Properly Insured
Homeowners policy holders must be aware that their coverage will likely change or could even cease automatically after their home becomes unoccupied or vacant. For example, some insurers may not pay claims if a home is vacant or unoccupied for 60 days or more. Other policies might automatically shift to a different amount of coverage (e.g. liability insurance only) after a specific number of days unoccupied. Also, some homeowners policies have a “vacancy clause” that can be triggered if the homeowner is gone for an extended period of time. If this happens, the homeowner could violate the terms of their contract and some or all of their coverage may not apply in the event of a loss.
Before a homeowner decides to leave a home vacant or unoccupied for a long period of time, they should speak to their insurance agent or company to learn how they define vacancy and unoccupancy, and whether the company will pay claims and which types of claims it will pay. Be honest about your situation, because while insurance in these situations may cost more, it could save you money down the road should there be an accident or damage to the home.
Many insurance companies offer an endorsement to your existing policy that will provide coverage for a dwelling that is unoccupied for an extended period of time. Alternatively, a vacancy policy can be purchased for varying term lengths to cover a few months to a year, depending on the need. This policy would replace your existing homeowners policy.
The cost of the coverage for a vacant or unoccupied home depends on the company, where the property is located as well as other factors, but the cost usually is higher than a typical homeowners policy due to the overall increase in risk.
Ohioans with questions about their insurance coverage can call the Ohio Department of Insurance at 1-800-686-1526 or visit www.insurance.ohio.gov