Due to the steep decline in the real estate market, there are many sellers who are finding it difficult to get a buyer for their house. The house remains vacant for a long time while it is up for sale. The problem is that they might lose their insurance cover when they leave the house, as a vacant home is considered riskier than an occupied one.
Risks like fire, water damage, theft and vandalism are significantly higher in case of vacant homes. The inflicted damage will also be more because there will be no one to take action to protect the property and a lot of time would have passed by the time neighbors or people passing by report the problem.
There is also a higher risk of third party liability claims like kids getting hurt while trying to climb a broken fence. That is why most insurance companies will revoke coverage of your home insurance policy completely if the house remains unoccupied for a certain period – usually more than a month.
There are several steps that you can take to deal with this problem. You should check your insurance policy and find out if you have the option of a vacancy permit. You can get this permit before your house has been left vacant for more than 30 days. You will get most of the general coverage, but there could be specific exclusions such as water damage, malicious acts and glass breakage.
If you do not have this option, then you can look for an insurance policy for vacant homes. Many insurance companies offer such policies, though you may have to pay a higher premium. You might get lower prices if you have some safety equipment such as smoke detectors or a central alarm system for fire and theft that can alert your neighbors.
Do not keep your insurer uninformed about your house being left vacant in the hope that you would still be able to make a claim for damage. There would usually be a neglect or abandonment of property clause, which would apply if you leave the house vacant for a month. This would relieve the insurance company from all its liabilities.
So when you are about to leave a house vacant, always check your existing policy and the relevant state laws, and then ensure that you have adequate insurance cover for the vacant house.