What to Do When No One’s Home: Insuring Vacant Properties

If you have ever purchased a house you did not move into for a while, or had tenants move out of your rental home unexpectedly, you probably have an idea of how difficult it can be to insure a vacant home.

In Victoria, many house and condos are usually rented to students; however, few students will be returning to our post-secondary institutions in the fall.  With pandemic restrictions shifting learning from face-to-face to online, we thought it would be a good time to give you a breakdown of what you need to know about insuring vacant homes and condo units.

What is vacancy?

In home insurance, vacancy means the home is not being lived in: whoever was living there has moved out, and whoever is moving in isn’t there yet.

A home or condo unit does not need to be empty of all belongings to be classed as vacant. It has more to do with intent and people than personal property.

If you go on vacation, your home may be unoccupied for a few days, weeks, or months, but it is not vacant, because you intend to return. However, if the sole resident of a house passes away, the home is considered vacant, despite being fully furnished and ready to be occupied, because no one is living there.

Why does vacancy impact my insurance?

Insurance companies charge higher premiums for vacant properties because the risk of damage increases when no one is living in the home.

Homes that appear vacant (unkempt landscaping, overflowing mailboxes, no (or highly regulated) signs of life inside) may be more likely targets for vandals or burglars.

And things that occur naturally (a burst pipe, or a branch through the roof, for instance) may not be noticed or mitigated for a long time if no one is living in the home. As you can imagine, a burst pipe left to leak for hours or days causes much more extensive damage than one that is tended to immediately, as would a hole in a roof during a rainstorm that doesn’t get patched up right away.

How does vacancy impact my insurance?

In addition to paying a higher premium, coverage is restricted on vacant homes.

Under most home insurance policies, vacant homes do not get coverage for:

• Water damage;
• Glass breakage; nor
• Vandalism or malicious acts.

While the additional premium is sometimes waived for the first month a home is vacant, the coverage restrictions apply immediately. Let your home insurance broker know right away, so they can begin the process of getting approval from the company insuring your home.

What should I do if my house becomes vacant?

As soon as you find out your home will be vacant, contact your home insurance broker. They will need to collect some information from you:

• When will/did the home become vacant?
• When will it be occupied again, or what is the anticipated closing date if it is for sale?
• How is the property being maintained while the home is vacant?
• Who is responsible for the home while it’s vacant, in the case of an emergency?
• Has the water been shut off?
• Is the heat being maintained?
• What security measures are in place?

If you are moving out of town, or cannot commit to regularly checking the property, hiring a professional property manager to monitor the vacant home may be a good idea. A family member in the area may be able to help out too!

If it is possible for a family member or a tenant to move into the home, then it will no longer be considered vacant.

Ultimately, the most important things to do when your home becomes vacant is to protect it, and to inform your broker!