What is Vacant Property Insurance?

May 1, 2024

Vacant property insurance is a type of insurance policy that provides coverage for properties that are unoccupied or vacant for an extended period of time. It is different from a standard homeowner's insurance policy, which requires the home to be occupied in order to be covered.

Vacant property insurance is a type of insurance policy that provides coverage for properties that are unoccupied or vacant for an extended period of time. It is different from a standard homeowner’s insurance policy, which requires the home to be occupied in order to be covered.

Vacant property insurance provides protection against various risks like fire, vandalism, theft, and weather damage when a property sits vacant. It covers the structure itself as well as any belongings left behind. Many mortgage lenders will require vacant property insurance if the owners move out and intend to sell the home.

The main difference between vacant property insurance and regular homeowner’s insurance is the occupancy requirement. A standard home policy requires that the home is inhabited by the policyholder, whereas vacant property insurance is intended for unoccupied homes. Vacant property policies usually have stricter eligibility requirements as well. For example, they may require that utilities be shut off, pools drained, and regular yard upkeep maintained. Premiums are also typically higher since vacant homes are seen as higher risk.

Overall, vacant property insurance gives coverage options for property owners with unoccupied dwellings. It provides protection that would not be available under a standard homeowner’s policy due to lack of occupancy. The policies are tailored to minimize risks associated with vacant buildings.

Also, Read : Backdating Insurance: Is It Fraud or Fair Game?

Why Get Vacant Property Insurance?

Leaving a property vacant exposes it to increased risks that make insurance coverage essential. An unoccupied building faces heightened danger of damage from vandalism, theft, fire, and natural disasters. Without adequate insurance, repairs or reconstruction could be financially devastating.

Vacant property insurance provides protection by covering losses from perils like wind, water, and fire damage. It guards against liability claims if someone gets injured on the premises. Coverage can also pay for vandalism, theft, glass breakage, and other risks heightened by vacancy. With the right policy, owners gain peace of mind knowing they are shielded from the expenses of rebuilding after a covered loss.

Insurance facilitates the process of renovating, selling, or leasing the property by allowing you to make needed repairs. It helps avoid derailing your plans due to an inability to fix unforeseen property damage. By mitigating the financial downsides, insurance gives you flexibility to keep the building vacant longer while you determine its future use. Overall, vacant property coverage is an affordable way to safeguard your investment as it sits unoccupied.

What Does Vacant Property Insurance Cover?

Vacant property insurance policies typically provide coverage for damage to the physical structure of the property and detachable fixtures caused by events like fire, lightning, windstorms, hail, explosions, riots, aircraft, vandalism, and smoke.

The main coverages vacant property insurance provides include:

  • Fire: This covers damage from fires, including wildfires. Some policies may cover fire damage from arson.
  • Lightning: Direct lightning strikes that result in fire damage are covered. Power surges from lightning may also be covered.
  • Windstorms: This includes damage caused by hurricanes, tornados, and thunderstorms with high winds.
  • Hail: Damage to the roof, siding, windows, and other exterior parts of the vacant building from hail is covered.
  • Vandalism or Malicious Mischief: Vandals breaking into and damaging the vacant property falls under this coverage. Most policies require visible marks of forced entry.
  • Falling Objects: If a tree falls on the vacant building and causes damage, it is likely covered. Some policies also cover damage from aircraft and vehicles.
  • Smoke: Smoke damage from a covered event like a neighboring fire is covered.

Common exclusions with vacant property insurance include:

  • Normal wear and tear, deterioration, and gradual damage over time.
  • Damage caused by domestic animals, birds, or rodents.
  • Losses from freezing water pipes or plumbing systems, unless heat is maintained.
  • Vandalism or theft if there are no visible signs of forced entry.
  • Damage from flood, surface water, or sewer backup. Separate flood insurance is required.
  • Earthquake damage in most cases.
  • Mold, fungus, wet or dry rot.
  • Losses that occur when the property has been vacant for over a set time period, usually between 30-90 days.

So in summary, vacant property insurance primarily covers damage to the physical building itself from covered events like fire, storms, and vandalism. Liability coverage and coverage for stolen contents are not included.

Also, Read : How Your Home’s Location Impacts Your Insurance Rates

How Much Does Vacant Property Insurance Cost?

The cost of vacant property insurance can vary significantly depending on various factors. Here are some of the main elements that impact the price:

  • Location of the property: Insurance rates are affected by the area where the vacant property is located. Properties in high-risk locations for crimes, fires, or natural disasters will have higher premiums. Rural areas generally have lower rates.
  • Building’s structure and age: Older buildings cost more to insure than newer ones. Materials used and the size of the building also impact rates.
  • Length of vacancy: Premiums are lowest if the property will be vacant for a short time, like between renters. Rates increase the longer it is continuously unoccupied.
  • Coverage options: More extensive coverage for perils like vandalism or theft will increase the cost but provide greater protection. Higher liability limits also raise the price.
  • Deductible amount: A higher deductible lowers the premium but increases out-of-pocket costs in the event of a claim.

The average cost for vacant property insurance is $500 to $2,500 annually for $100,000 to $500,000 in dwelling coverage limits. However, premiums outside of this range are not uncommon. To get an accurate rate quote, it’s best to contact an insurance professional and provide details about the property. They can give options for tailored coverage at competitive pricing. With some shopping around, vacant property owners can find affordable insurance to properly protect their investment.

How to Get Vacant Property Insurance

Getting vacant property insurance starts with determining if you and your property are eligible for coverage. Most insurers have specific requirements for vacant dwellings in order to qualify for protection.

Eligibility Requirements

In order to get vacant dwelling insurance, your property will need to meet certain criteria:

  • The home must be completely unoccupied. Policies will not cover a property that is still in use, even if only occasionally.
  • The utilities need to be shut off, unless temperature maintenance systems are in place. All water systems should be winterized as well.
  • Doors and windows must be secured. This means having solid core doors, window locks, sealed openings, and no broken glass.
  • The yard needs regular maintenance. Grass should be cut, leaves raked, and snow shoveled. A poorly maintained exterior risks vandalism.
  • There should be no existing damage or vandalism. Insurers will inspect for any preexisting conditions.
  • Lockboxes, alarms, and other security may be required. Vacant homes are targets for theft and crime.

If your vacant dwelling meets eligibility standards, you can start shopping for a policy.

Vacant Property Insurance Claims

Making a claim on your vacant property insurance policy can seem daunting, but understanding the process will help ensure your claim goes smoothly.

When an insured loss occurs at your vacant property, you’ll need to promptly notify your insurance company and file a claim. This starts the claims process.

Making a Claim

To make a claim, contact your insurance company as soon as possible after the loss or damage occurs. Provide details about what happened and the extent of damage. Your insurance company may ask for photos or documentation.

Cooperate fully with your insurance adjuster, who will investigate the claim, assess damages, and determine coverage. Be prepared to provide proof of loss and ownership. Maintain accurate records of repair expenses and temporary housing costs if applicable.

Once the claim is approved, your insurance company will issue payment according to your policy terms. Most policies have a deductible you must pay out of pocket before insurance benefits kick in.

Claims Process Overview

The vacant property claims process generally involves:

  • Notifying your insurer of the loss
  • Having an adjuster inspect damages
  • Submitting necessary paperwork
  • Making repairs per your policy
  • Receiving reimbursement from the insurer

The specifics can vary based on your policy and type of damage. For major losses, expect multiple visits and communications with adjusters and contractors over weeks or months.

It’s wise to understand the standard claims procedures for your vacant property policy ahead of time. This makes navigating the process much easier if you ever need to file a claim.

Also, Read : Can I Have Two Home Insurance Policies On One House? Exploring the Possibilities

Protecting a Vacant Property

Protecting your vacant property from damage and vandalism should be a top priority. Here are some tips to keep your vacant home or building secure:

Security Tips

  • Change the locks when you vacate the property. This ensures no previous tenants or realtors have access.
  • Install deadbolt locks on all exterior doors. Deadbolts provide more security than regular doorknobs.
  • Secure all windows by putting wooden dowels in the tracks or installing window pins. This prevents windows from being forced open.
  • Install security lighting around the exterior. Motion sensor lights are ideal. Keep lights on timers so the home appears occupied.
  • Post “no trespassing” signs around the property. Also post signs indicating the home is protected by a security system even if it is not.
  • Keep landscaping trim and tidy. Overgrown vegetation can allow criminals to hide.
  • Ask a neighbor to keep an eye on the property. Offer to do the same for them.
  • Install a monitored security system. Professional monitoring provides an extra layer of protection.
  • Set up exterior cameras to monitor all sides of the home. Choose cameras with night vision and motion activation.
  • Hire a house-sitting service to make the home look lived in. They can park cars in the driveway and mow the lawn.

Maintenance Best Practices

  • Shut off the water supply and drain all pipes and tanks. This prevents frozen or broken pipes.
  • Turn off electricity unless needed for security systems. Unplug all appliances to prevent fires.
  • Set the thermostat to 55°F in cold months to keep pipes from freezing. Keep A/C set to 80°F in warm months.
  • Have someone inspect the home weekly. Check for weather damage, leaks, mold, and pests. Address issues immediately.
  • Run faucets and flush toilets weekly to keep plumbing in working order. Pour RV antifreeze in traps.
  • Clean out refrigerator and discard all perishable foods so odors don’t linger. Unplug fridge once empty.
  • Eliminate all fuel, oil, and gas cans which could leak or combust.
  • Place desiccants in closets and cabinets to absorb moisture and prevent mildew smells.
  • Cover furniture and belongings with sheets or tarps to prevent dust buildup and fading.

Taking preventative measures will help avoid damage and make your vacant property less enticing to criminals. A secure, well-maintained home will be easier to sell or rent when the time comes.

Alternatives to Vacant Property Insurance

There are a couple alternatives to purchasing vacant property insurance that property owners sometimes consider:


Some property owners with sufficient assets opt to self-insure their vacant property instead of purchasing a policy. This essentially means they are willing to risk paying for any damages, theft, or liability claims out of pocket if something happens.

The main advantage of self-insuring is avoiding paying monthly premiums. However, the risks are high, especially if the property is destroyed or causes injuries. Repair and legal costs could quickly escalate to hundreds of thousands of dollars or more.

Self-insuring requires disciplined saving and access to contingency funds in case disaster strikes. It’s generally only an option for well-financed owners with multiple properties. Individuals and most mom-and-pop landlords need the protection of insurance policies.

Using a property manager

Another option is having a professional property management company oversee the vacant building. Property managers routinely check on properties, perform maintenance, and take security precautions.

In some cases, a property management firm can add a vacant building to their existing insurance policy, which spreads the risk. Property owners may be able to pay a lower premium this way.

However, property managers charge monthly fees for their services. The costs may end up being more than just purchasing a vacant property policy directly. It’s important to get quotes and compare pricing.

In general, vacant property insurance remains the most prudent choice for most owners. The protections are worth the premium costs. But self-insuring or using a property manager are alternatives to consider in specific circumstances.

Frequently Asked Questions

What types of vacant properties can get insurance?

Vacant property insurance is available for unoccupied houses, apartments, condos, mobile homes, and commercial buildings. Both residential and commercial vacant properties can qualify for coverage.

How long can a property be vacant and still get insurance?

Insurance companies will insure vacant properties that have been unoccupied anywhere from 30 days up to several years. However, the longer a property is vacant, the higher the risk and premiums.

Does vacant property insurance cover vandalism?

Yes, acts of vandalism like broken windows, graffiti, and damage to the property are standard covered losses under a vacant dwelling policy. Most policies also cover theft and water damage.

Is vacant property insurance more expensive?

Yes, insurance for a vacant home or building costs significantly more than an owner-occupied property, often 2-3 times higher. The increased risk of damage and liability raises the rates.

Can I get vacant rental property insurance?

Yes, landlords can get coverage for their unoccupied rental homes or apartments. This vacant rental dwelling insurance protects the owner’s investment in between tenants.

What is the difference between vacant and abandoned property insurance?

Vacant property insurance covers unoccupied but actively maintained homes. Abandoned property insurance is for buildings the owner no longer wants or that have been deserted and neglected.

What kinds of losses are not covered?

Standard exclusions include flood, earthquake, normal wear and tear, mechanical failure, and gradual deterioration of the vacant property over time. Liability protection may also be limited.

How long does it take to get vacant dwelling insurance?

Quotes can usually be obtained immediately online or over the phone. However, the application process may take 1-2 weeks for approval, inspection, and bind coverage. Start the process well in advance of when you need coverage.

Can I get vacant condo insurance?

Yes, condominium associations can purchase a policy to cover vacant units within the building that are unoccupied. This protects all owners against losses to units or common areas.

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