Vacant Homes Need Special Insurance Coverage
You buy a new home and while you’re packing for the move, you find out the deal fell through on the other end. You’re so busy dealing with your bank and realtor to fix the mess, you forgot an important aspect... your homeowners insurance coverage.
That’s right, you’re still on the hook for insuring your former home. Vacant homes are not usually insured for more than 30 days, too. Beyond a month, you can request a special permit from your insurer. If they grant you this (and they may not), the special coverage can be expensive.
Without this knowledge, and measures to act upon it, you’re taking a huge financial risk. An insurance broker will find out what your insurer covers and, if necessary, shop around for a company that will insure your vacant home. Buying directly from an insurer, on the other hand, doesn’t give you that option.
Make sure you inform your broker that your home will sit vacant - before you move out. And act fast if you need to request a special permit beyond the 30 days of vacancy; don’t wait until that period of time has past. A Vacancy Permit will maintain most of your homeowners coverage, but won’t protect you against water damage (pipes freezing in the absence of the heating system operating), glass breakage and vandalism.
Unoccupied Home: Different Risks
A vacant home is not to be confused with an “unoccupied” home - where you’re coming back in a set period of time from a vacation, for example. In that case, the house continues to be insured while they are away -- even if it is for longer than 30 days.
Note to snowbirds who live elsewhere during harsh Ontario winters: If your house is unoccupied and your pipes or other plumbing, heating, sprinkling system or appliance freezes, your insurance will not cover the resulting water damage. Be sure to have a (competent) friend or family member visit your house daily.
Rental Home Insurance
A solution to avoid expense vacant home insurance is to rent out the vacant home - and that changes your insurance coverage again. But that’s a blog post for another day! In the meantime, talk to your insurance broker about this important issue (like all others relating to your home ownership).
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