Did you know that a standard home insurance policy for a primary residence includes a clause buried deep within the policy called a vacancy clause? The vacancy clause can completely suspend your coverages if the conditions of the clause are met.
What are some examples of a vacant home?
We commonly see these situations where the owner of the home is deceased and the home is going through probate. Or when somebody moves out of their home into a new home and their old residence is sitting vacant while listed for sale. Or when somebody purchases a new home but won’t be moving into the new home for 2 or more months.
So what exactly is the vacancy clause?
The vacancy clause is commonly listed in the “change of occupancy” paragraph in the conditions section of the policy. It states that after 60 days of vacancy any loss occurring from the 61st day onward will be excluded from coverage. The verbiage goes on to state that if this occurs, the premium would be refunded for the period during which the coverage is suspended. In other words, this means that if a home is sitting vacant for 60 days and the house burns down on the 61st day, the most you’ll likely get from your insurance company is a partial refund of your insurance premium.
So what do you do?
The first thing you’ll need to do is to notify your insurance company that the home is vacant. Most times the insurance company will either cancel or non-renew your current policy, but they’ll generally give you advanced notice of the cancellation. Then you’ll want to secure a vacant home insurance policy. Keep in mind that these policies are quite a bit more expensive than a standard home insurance policy, but they’ll provide coverage for the dwelling while it sits vacant.
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