Nowadays, purchasing a second home is a growing tendency among young homeowners. Some prefer a summer cottage to share with friends, while others like to enjoy a cozy cabin for winter break. If you own this type of property, chances are standard coverage won’t be enough. For these special cases, you should consider purchasing vacant home insurance.
Having vacant home insurance is an excellent option if you own a home that remains empty for long periods. Remember that there is a difference between vacant homes and unoccupied ones. An unoccupied property is one that still has some of your personal belongings. This means you could return to live in the house at any time. A vacant residence is one that remains empty for several weeks.
We know that it could be difficult to determine whether your property classifies as unoccupied or vacant. To help you out, we will tell you in which cases you will need vacant home insurance.
When to purchase a vacant home insurance
Keep in mind that this is house insurance for an empty property you don’t use regularly. Many landlords get confused with this concept, and think that because they are not living in the rental property they need vacant home insurance. However, that is not the case. If you purchase a second home to rent, you would need a different policy. If you want to learn more about the top insurance policies available for you, read here.
Now here are some of the situations in which you might need to purchase vacant home insurance.
- If you move out of the house and decide to sell the property. This can take a long time, especially if you are trying to find a buyer during the winter season.
- When you are doing a complete renovation of your home and you can’t live in the property.
- Having a vacation home is the most common scenario in which you will need this insurance. If you are only there for a couple of weeks or months, your property is classified as a vacant home.
- In case you get into an accident and require long medical care. This means you are unable to leave the hospital for a long time.
- The only instance in which a landlord would require this policy is if the rental property is empty for a complete season.
- If you are away on military duty, or take a long vacation.
The easiest way to identify a vacant home is thinking about a property that is empty for more than 30 days and doesn’t contain any of your personal belongings.
Vacant Home Insurance
As we mentioned before, this is house insurance for an empty property, which could be a second home you use during vacation. Vacant home insurance could be purchased as an add-on to your policy or as a separate coverage. In case you buy it as an endorsement, you’ll still have to pay for the standard homeowner’s insurance.
The main reason why you should consider purchasing this policy is that basic home insurance won’t protect you. This means that any damages you would have to pay out of your pocket.
Vacant home insurance exists to protect your financial well-being in case of peril. These properties represent a greater risk because any potential hazard would be discovered too late. For instance, if a pipe gets clogged and bursts flooding your entire living room. Once you get notified, the damage would be significant. If the same thing were to happen in your home, the problem could be fixed within hours.
Coverage of Vacant Home Insurance
The main purpose of this policy is to offer you the same kind of coverage as homeowner’s insurance. This means you will have protection against theft, vandalism, fire, explosions and lighting. However, just like standard insurance, if you want to have coverage for flooding, you will need to get an additional policy from a private agent.
Keep in mind that in this regard the vacant home insurance cost is not the most important factor. First, you need to make sure that you are getting all the coverage you need. Plus, double-check the time limit of the policy. Most companies offer flexible terms from three months up to a year.
Vacant Home Insurance Cost
Some factors that could determine the cost of your insurance include age, the state of the house and the inventory value. Also, the purpose of the home will influence the price. This refers to: what are you using it for? Is it a vacation home? Is it a property that is up for sale? This is probably the main element that insurance companies consider when evaluating the price of your premium.
Overall you can expect the vacant home insurance cost to be 50% more expensive compared to a standard policy. This means that per year you will have an additional $500 added to your bills. However, the price can vary depending on your insurance company and how much coverage you want. To find the best possible rate, you should ask for several quotes from different providers.
How to buy vacant home insurance
The first thing you need to decide before purchasing the policy is whether it would be a separate coverage or an add on. We recommend purchasing it as an endorsement if you are a landlord. For instance, let’s say you know that your rental home is going to be empty for a couple of months while you find new tenants. With an endorsement, you can simply change your policy to vacant home insurance for the time you like.
Then, it is time to start looking for the right provider. Most companies offer vacant home insurance. But in case you are not sure where to start, you can do a quick Google search for the top provider in your city. After you have the quotes, you should take your time to read them. Compare the premiums, deductibles, perils included, possible benefits and discounts. Having home insurance for an empty property is the best option if you don’t want to get caught up paying for the damages with your hard-earned money.
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