Vacant property risk and what that could mean under your insurance policy

Did you know a vacant property can potentially void your insurance policy?

A property can be left empty for a number of reasons, whether the home is in-between renters, or the owners have already moved or if they follow a snowbird lifestyle. Whatever the reason, it’s important to know that an empty property can void an insurance policy which means if something happens, you may not have coverage.

Why? Well, an empty property is a risky property. If a property is left unoccupied for more than a few days, it is statistically riskier to insure. One reason is that damage can go unnoticed for longer periods of time, which can increase the severity of damages. For example, if a pipe were to burst, the water damage could go undetected for a longer period of time, resulting in more extensive damage than if it had been caught right away. Empty homes are also more appealing for thieves and vandals.

At what point is a house considered vacant?

It depends on the policy, but most insurers consider a home to be vacant after 30 consecutive days.

When most people think about a vacant or unoccupied house, they envision an abandoned property. This is not what it means from an insurance perspective. For insurance purposes, a home can be considered vacant for many reasons:

• It’s unoccupied because you are travelling.
• It’s for sale, or you recently purchased the dwelling.
• It’s for rent – you are in between tenants.
• The property is undergoing renovation.
• You inherited the home.
• You spend the summer or winter in another location.

What is the difference between an ‘unoccupied’ and ‘vacant’ home?

Unoccupied (or uninhabited home) is a property that you as the owner intend to return to. It is fit to live in currently meaning the utilities and appliances inside are functioning.

A vacant property is one that you as the owner have no intention to return to or live in (or rent out to others) for a set period of time.

How can I avoid an issue with my property insurer?

Here are some options when it comes to your property insurance and vacancy:

1. You can set up a plan for a trusted friend or family member to routinely check your vacant home or have someone house-sit for the time you will be gone.
2. You can purchase an endorsement that will be added to your existing policy that removes the exclusion related to vacancy.
3. You could purchase a separate vacant-home insurance policy.

 

If you choose to have a friend or family member, check in on your house during its period of vacancy, make sure they check each room to ensure nothing has happened. If your water has been left on, they should run the taps as well. They should also check that the heating system is functioning (especially in the winter). Depending on how long you’re out of the house, they may need to collect mail and perform general maintenance on the house as well. They should be informed of what to do in the event of damage or a situation where you lose power. Keeping a log of inspections can help if there is ever a claim. This will also help your friend or family member spot a small issue before it becomes a major one.

Always notify your insurance company about extended absences. Some insurance companies will allow you to add an endorsement that will remove the exclusion related to vacancy. Remember its always better to be safe than sorry.

More Tips for Protecting Your Vacant Property

• Do regular visits periodically: If you can’t drop by yourself, ask a trusted neighbour, family member, or friend to check on the property from time to time. This gives people in the area the illusion that it’s occupied from time to time.
• Incorporate security measures: Make your home safer by installing measures that deter and keep out intruders. If you have a smart home system, set motion sensor-activated or timed lights to turn on at different hours. You can also install video cameras that you can view and access through your smartphone and add deadbolt locks to your doors.
• Maintain your property: Have someone mow the lawn, rake leaves, and collect the mail so your property appears lived in.
• Park a vehicle in front of the property: If you can, ask a neighbour or friend to park their car on your driveway to fool would-be intruders into thinking the house is occupied.
• Install sprinklers and fire alarms: Fires from nearby buildings, faulty wiring, or other causes can destroy your home in your absence. Get smart alarms that activate sprinklers and alert you on your mobile devices.
• Remove valuable items: Take expensive objects such as art, jewelry, and electronics out of your home if you will be away for a long period and store them at a safe, separate location.

 

If your insurer has denied your property insurance claim due to vacancy and you’ve unsuccessfully appealed the claim through their internal complaints process, you can submit a complaint to us for an additional review here.