What Is Vacant Home Insurance?
- Vacant home insurance covers damage to a home that is uninhabited and unfurnished.
- If your house is going to be empty for an extended period of time, your standard home insurance might not cover damages.
- Vacant home insurance is slightly different from unoccupied home insurance, which covers furnished homes without residents.
How does vacant home insurance work?
Vacant home insurance pays for damages to a home empty of residents against covered perils. In the event of damage due to an event covered under your vacant house insurance policy, your insurer will pay out for damages up to your coverage limits.
Depending on the insurer you get coverage from, a vacant home insurance policy can be purchased either as a stand-alone policy or as an add-on to your current home insurance policy.
Vacant home insurance vs. unoccupied home insurance
- Vacant home insurance covers homes that are uninhabited and have no belongings in it.
- Unoccupied home insurance is for uninhabited homes that do have belongings inside them.
While they’re pretty similar policy types, insurers make the distinction for coverage purposes.
As an example, if you own a home that you rent out, but there are currently no renters (or their belongings) in the house, then you would probably want to get a vacated home insurance policy.
But if you own a furnished summer vacation home that is unused for the rest of the year, you would want to get unoccupied home insurance.
Do I need vacant home insurance?
State laws do not require homeowners to carry vacant home insurance. However if you bought the house through a lender, they will probably insist you carry it as part of your mortgage agreement if the home is empty for a set amount of time.
The time limit a property with a standard home insurance policy can be empty before it needs a vacant home insurance policy is usually between 30 and 60 days.
Situations where you may need a vacant home insurance policy include:
- You’ve bought a new home but are not moving into it in the near future
- You’re selling the home, and all your belongings are already moved out
- You are out of your house while construction work is being done on it
- You are no longer living in the house and are getting it ready to be a rental unit
If you own the home free and clear, you are not required to have a vacant home insurance policy. But if the house gets damaged, you will likely have to pay the costs out of your own pocket.
Damage to a vacant home can be extensive if no one is around to stop it in time. For a relatively low price, a vacant home insurance policy could save you a lot of money.
What does vacant home insurance cover?
Vacant home insurance comes in three types of policies. Dwelling Fire Form 1 (DP1) is the least expensive, followed by DP2 and DP3, respectively. Depending on your coverage needs, it may be wise to spend a little more on your empty house insurance policy.
DP1
A DP1 policy, or “Dwelling Fire Form 1” policy, is the most common vacant home insurance policy and usually covers:
- Fire, smoke and lightning
- Hail
- Windstorms
- Volcanic explosions
- Internal and external explosions
- Damage from aircraft and vehicles
- Civil unrest
A DP1 is a named policy. This means it only covers risks/perils expressly stated in the policy. Everything else is excluded under it.
A DP1 pays out on damages at actual cash value. This means that depreciation is taken into account when calculating repair cost.
DP2
A DP2 policy usually covers the perils in a DP1 along with several others, including:
- Frozen pipes
- Vandalism
- Electrical damage
- Glass breakage
- Structure collapse, cracking or bulging
- Water or steam damage
DP3
The DP3 is the Cadillac of the three dwelling fire form policies. It is an “open peril policy,” meaning that anything is covered as long as it is not expressly excluded in your policy.
A DP3 also provides coverage at replacement cost. This means that depreciation is not taken into account when your claim amount is calculated.
How do I get a vacant home insurance policy?
An easy way to start getting vacant homeowners insurance is to see if your current insurer offers the coverage as an add-on to your current home insurance policy. This can save you the trouble of buying vacant home insurance, and then buying an all-new home insurance policy again later.
If your home insurance company can offer it as an add-on, you may still want to compare your current premium with the add-on to what other insurers are offering for vacant home insurance.
Insurers can have different costs for the same coverage because they weigh risks differently. Factors that are usually involved in calculating your vacant home insurance quote include:
- Age of the home
- Construction materials used
- ZIP code
- Reason for vacancy
- Coverage limits
- Deductible chosen
One company may consider the age of the home to be a bigger risk than another would, and they may raise your premium because of it.
By comparing home insurance quotes, you increase your chances of finding the best coverage for your needs at the best cost.
When finding quotes for vacant home insurance, make sure to use the same coverage limits for each quote to get an accurate comparison.
Once you find an insurer with the best combo of price and coverage for you, go online or call an agent of the company you chose. If you have any questions about the policy, the agent will be there to answer your questions as well.