Vacant or Unoccupied House What's the Difference

How Homeowners Insurance Companies Respond to Home Vacancies

Oct 26, 2009

To the layperson the term 'vacant' means the same as 'unoccupied.' However, in the world of insurance, they have two very distinct and different meanings.

Insurance companies look upon one term more favorably than the other. The term unoccupied is a temporary lack of occupancy. For example, when a family goes away for vacation, the home is temporarily unoccupied. The furniture, furnishings and personal belongings are still in the home, but the people are gone for a week or so. Insurance companies expect homes to be unoccupied from time to time.

Usually when a family goes on vacation, they have a friend, family member or neighbors look out for the home, water the plants and feed the fish. In other words, the home, although unoccupied, is not abandoned.

A vacant home, on the other hand, is void of people and furnishings. In today's real estate market, for example, some home buyers purchase a new home, hoping the old one will sell. They move all of the furnishings from the old home to the new one while waiting for an offer on the old home. During this time the old home is vacant. No one is living there, the furnishings are gone and the occasional check on the home by the realtor or neighbor is not enough to make insurance companies feel comfortable insuring such a risk.

How Does a Homeowner Insure a Vacant Home?

Standard homeowner's policy usually has a vacancy clause. The vacancy clause stipulates the number of days a house can be vacant before the insurance company has the right to cancel the policy.

If the vacancy situation is temporary with an end in sight, homeowners may be able to negotiate extended coverage with the insurance company. Ensuring things like regular patrolling of the house (both inside and out) keeping the grounds well kept and removing the junk mail from the mailbox helps. The goal is to make a vacant house look lived in even though its not. Once a house is known to be vacant, that's when vandals strike.

It's best to negotiate with the existing insurance company to keep coverage in effect. It might behoove the homeowner to hire someone to take on the task of being a house sitter until the home is sold.

Fair Plan Insurance- The Homeowners Policy of Last Resort

If the house remains vacant longer than the insurance company is willing to provide insurance, the homeowner has little alternative except to apply for insurance through the Fair Plan offered by the state. Each state has a Fair Plan that provides property insurance coverage for high risk properties. Premiums for such coverage is expensive and is the homeowner's last alternative for securing insurance. Homeowners can find out more information about their state's Fair Plan by contacting the state's Department of Insurance.

The copyright of the article Vacant or Unoccupied House What's the Difference in Home/Property Insurance is owned by Felicia A. Williams. Permission to republish Vacant or Unoccupied House What's the Difference in print or online must be granted by the author in writing.