Vacant home insurance: Who needs it and how it works

If you’re planning to leave your home empty for an extended period of time, your homeowners insurance might be at risk and you may need to buy vacant home insurance.

For homeowners insurance, vacant means that the home is empty of both people and property; unoccupied simply means the owners are away but have left everything and plan to return. While a snowbird heading south leaves the home unoccupied, a person who has moved out and taken all of their property leaves the home vacant.

Vacant homes are considered a different type of risk by home insurance companies. If your home will be vacant for more than 30 days (while you’re trying to sell it, for example) you should explore your options for additional coverage.

“Consider buying vacant home insurance coverage,” says Loretta Worters, vice president of media relations for the Insurance Information Institute. “That way, if damage occurs and goes unnoticed for a while, you’ll still be protected.”

What is vacant home insurance?

Purchasing a vacant homeowners insurance policy ensures that your home is covered for damages if something happens while the home is empty but you still own it.

Some insurance companies will not insure your home if it is left vacant for a long time, Worters says. That could put you in financial jeopardy.

Homeowners insurance companies usually give you a window for how long a house can be vacant, such as 60 days. Some insurers may only allow a vacancy of 30 days.

“[Without vacant homeowners insurance], any damages or losses that occur would have to be paid out of pocket,” Worters says.

Home insurers will often work with you if you have a special situation — for example, if you bought a new house and are waiting to sell your vacant house, but are still checking in on it. Contact your insurance company to learn its policies for vacant homes so you can be sure your home is covered when you are not there.

What does vacant home insurance cover?

A vacant dwelling insurance policy provides coverage that is very similar to a traditional homeowners insurance policy. For example, you will be covered if your home burns down or is damaged in a windstorm. Damage from hail and lightning are also typically covered.  

However, there are some coverage exceptions, especially for damage that gets worse over time, such as a burst pipe that causes water damage. Some insurers may offer riders you can purchase at an extra fee to ensure you still have adequate coverage.

How much does vacant home insurance cost?

Homeowners insurance companies often discontinue coverage for a vacant home because vacant homes come with more risks. For example, a burst pipe can wreak havoc on a home when nobody resolves the issue. That damage may continue to get worse with time.

“The resulting damage is likely to be worse because no one is around to report it or stop it,” Worters says.

Because of this, vacant home insurance tends to cost more than a standard homeowners insurance policy. In fact, an insurer might charge you 50% to 60% more to insure a vacant home, according to the Insurance Information Institute.

Worters notes that if you have someone to keep tabs on your property, like a house sitter, you could get a lower premium. Ask your insurance company to be sure.

In addition, Worters says you might get a lower rate if your home has extra protections, such as:

• A central alarm system
• Deadbolt locks
• Smoke detectors
• Winterization of the home to protect plumbing fixtures from freezing weather

While insuring a vacant home is more costly than covering an occupied home, there may be exceptions to that rule. If you can show the insurer that your vacant home doesn’t pose more risks than an occupied home, you may be able to get a more affordable rate.

Who should get vacant homeowners insurance

If you know that you will leave a home vacant for at least 30 days, call your insurer and find out whether you need to purchase vacant property insurance.

“If you leave your home unattended for more than 30 days, your homeowners policy likely won’t provide coverage in the event of a claim when it is unoccupied or vacant,” Worters says.

There are many instances when a home could be vacant for several weeks or longer. These include:

• Periods after you move but have not yet sold your house
• Long renovations that require you to temporarily relocate
• Vacancies that occur when you are between tenants in a rental home you own
• A time when you are selling a home as an executor of an estate

In some cases, you might not need vacant home insurance. If your home is only going to be vacant for a short period — such as just for a season — some insurers might offer an endorsement to your regular homeowners insurance policy that will cover you until the home is occupied again. You may also not need to get an entirely new policy if you have renters.

You should always talk to your insurer to be sure.

What are the best vacant home insurance companies?

Not all insurance companies sell vacant homeowners insurance policies, but there are still many options to choose from.

The best vacant home insurance company is the one that meets your needs, both in terms of price and coverage. Here are a few of your options:

American Family Insurance

American Family Insurance offers a basic vacant home insurance coverage policy that can be expanded to add coverage for personal property. Policies are available in lengths such as three-, six- or 12-month terms.

American Modern Insurance

American Modern Insurance offers a policy that covers losses due to fire, lightning, wind, hail, explosion and more. Actual cash value coverage is available that considers depreciation when settling your claim. Policies are available for up to 12 months.

Farmers Insurance

Farmers offers a 12-month policy, but the cost can be prorated if you cancel early. Extra coverage is available to protect you from damage from vandalism.

Foremost

Foremost offers a one-year policy that can be renewed for up to four years. Homes valued up to $1 million are eligible for coverage. It also offers prorated cancellation.

How to shop for vacant homeowners insurance

Before you purchase vacant home insurance, make sure you need it. Ask your home insurer how long you can leave your home vacant before the company will no longer cover your claims.

If you need to get vacant home insurance, ask if you can obtain it with a simple rider to your current homeowners policy. If that is not an option, you will probably need to purchase a separate vacant home insurance policy.

Additionally, you don’t need to purchase a vacant homeowners insurance policy from you current insurer. You may be able to find an insurer that offers more affordable rates by shopping around. Compare rates and coverages from different companies to get the best price and policy for you.

And while a low price is important, you should still ask the insurance companies in which you are interested exactly what their vacant home insurance policy covers and doesn’t cover. That way, you can find the policy that is the best fit for you.

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