Shuman Roy is an entrepreneur, business owner, and musician. He started RoysNoys, LLC in 2013 as a music production and education service company. He also offers small business consulting and advisory services to help businesses get from start-up mode to turn-key operations. Shuman earned his M.B.A from the Stern School of Business in 2001 and has an undergraduate degree from Manhattan College in ...

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Joel Ohman is the CEO of a private equity-backed digital media company. He is a CERTIFIED FINANCIAL PLANNER™, author, angel investor, and serial entrepreneur who loves creating new things, whether books or businesses. He has also previously served as the founder and resident CFP® of a national insurance agency, Real Time Health Quotes. He has an MBA from the University of South Florida. Joel...

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Reviewed by Joel Ohman
Founder, CFP®

UPDATED: Oct 21, 2021

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You may end up holding an unoccupied house for any number of reasons; pending sale, extensive renovation, inability to find a tenant, and so on.

A homeowner’s insurance policy is not designed or intended to cover vacant homes.

Typically, a home is considered vacant if it is unoccupied for over 60 days or if it doesn’t have a certificate of occupancy for any reason, such as no utilities for example.

Whatever the reason, you will need a vacant dwelling policy to insure the unoccupied home.

Are unoccupied houses more expensive to insure?

Unoccupied houses tend to cost more to insure than an occupied dwelling for a number of reasons.

Vacant property is more commonly targeted for theft and vandalism, and there is obviously no one around to maintain the home or to contact the fire department/police if the home were to catch on fire. There can be serious water damage done to the house if it floods due to frozen pipes, and no one is aware for an elongated period of time either. Not to mention, with vacant houses, since there is never any sort of security alarm, anything can happen inside the building in terms of human use. More often than not this can lead to using the space for malicious purposes.

If you insure a vacant home on a standard homeowner’s policy and file an insurance claim, it will not be paid if the insurance company can prove it was vacant.

Don’t bury your head in the sand on this one…it can cost you big money if there is a property damage or liability claim filed against you.

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What does a vacancy policy cover?

Really, it covers almost everything a standard homeowner’s policy would cover with a few exclusions. However, many of the exclusions can be removed by endorsing the policy with more coverage.

You can expect to have the dwelling (the home) and ‘other structures’ covered for the actual cash value. True replacement cost coverage is hard to come by, since there is typically a limit on what standard home insurance policies can offer.

This is true when it comes to unoccupied home insurance policies as well. There are limits, simply because if a house was left vacant for a massively extended period of time, and accrued a vast array of damages, it could end up becoming a loss. The amount of money it would take to reimburse someone would far outshine simply demolishing the house, and no one would turn a profit in that case.

Additionally, you can purchase insurance for the home’s contents. Liability coverage is available through some companies, but not all of them, so if you want it, make sure to ask your agent.

Remember, even if a dwelling is vacant, you are still legally liable for bodily injury someone may suffer on your property.

Are both vandalism and malicious mischief covered?

Depending on the location of your unoccupied property you may want to expressly ask for extended coverage and coverage for vandalism and malicious mischief, known as VMM in insurance circles, which is typically excluded.

The definition of extended coverage may vary slightly by each insurer.

With some unoccupied property insurance, it may be prudent to add coverage for more causes of loss. For example, theft may not be covered on the basic policy unless it is added by request. Vandalism coverage is another such type.

Picture the copper pipes and wiring being stolen from a home if it is undergoing renovation. That can’t be described as something that would happen during any natural disasters, so if you didn’t have theft protection, chances are you wouldn’t be reimbursed for the stolen goods.

Vandalism and malicious mischief coverage may be necessary depending on where the home is located.

Vacant home coverage is highly recommended, as unoccupied houses are most often targeted for this type of activity.

Picture neighborhood children breaking out windows and kicking holes in the walls while the home is vacant.

You can always find insurance quotes online and/or visit an independent insurance agent to be certain you have the exact coverage you need for your vacant home.

Remember, insurance companies require this type of policy to be in-force if you expect them to pay any claims on the property.