Insuring Vacant Homes

As homes languish on the market, many homeowners are vacating their homes. This can be for a variety of reasons. They may have to move for a job relocation; they may have purchased another home; or they may be negotiating a short sale with the lender and have made other living arrangements. Whatever the reason, a vacant home may cause a problem with your insurance coverage.

Insurance companies consider vacant homes to be a high risk for vandalism and theft. And if there is a fire or a burst water pipe, no one is there to report it, so the resulting damage can be much greater. You need to check your policy to see if your vacant home is covered. If not, you should consider getting vacant homeowners coverage. Ask your existing insurer if they offer the policy. But you should also comparison shop with other insurers for the best rate. Coverage may also be available through some state-run insurance plans, such as Fair Access to Insurance Requirements (FAIR) Plan.

If you can't get - or afford - vacant homeowners insurance, you might want to consider these options:

Stay in the home until it's sold. If more than one person now resides in the home, perhaps one could remain while the other moves;

Discuss the pros and cons of renting the home with your Realtor. If you decide this is a good option, you may need to change your insurance to reflect that the property is now a rental. But that insurance will be cheaper than vacant home insurance; or

Hire a house-sitter, or allow a friend or relation live in the home until it sells.

Even if you can't have someone live into the house, try to make it look like someone is living there. Keep the home and yard maintained. Periodically enter the home to make sure there are no leaks, cracked windows, etc. Don't allow the mail, newspapers or deliveries to pile up.

You may want to install a security system. Consider putting the lights on timers and make sure the windows are covered. You might ask a neighbor to park in the driveway.

Whatever you do, don't commit fraud by lying to your insurance company. Most policies allow you to leave the home vacant for a certain period of time before you are required to switch to a vacant home policy. If leave your home vacant longer than your current policy permits and the place is damaged or destroyed, the insurer can challenge the claim.