A question I get asked on occasion goes something like this:
"My company transferred me and I have to move before my home is sold. How is my home covered after I move out?"
This is a great question! Frankly, most homeowners don't even bother to ask the question. They're anxious to move to their new city, start their new job, get the kids settled in new schools, etc. They just aren't thinking about what would happen if a claim occurred after they moved out, the movers have packed up their stuff and left, no one lives there anymore, but they still own the property. Do they have coverage?
In this post I'm going to strictly be discussing the Homeowners Insurance policy only. You may own a rental property in which the home is vacant and unoccupied in between rentals. This is a different type of policy and will have different coverage provisions than the home insurance policy but I'm not discussing this policy in this post.
I would say that most people who leave a home vacant because of a job transfer assume they will have coverage from their insurance company if something should happen. We all know what happens when we ASSUME!
So, don't assume anything when it comes to your home insurance. Read your policy and consult your agent or insurance company for such a scenario as your home being vacant for a time. It's important that you do this because every policy is different. They don't all use the same policy language so you need to know how your current insurance company will handle coverage if your home becomes vacant. What I will discuss in this post is generally how most insurance companies handle vacancies, you'll want to consult your policy for your exact coverage.
So far, I've only used the word Vacant but you will also see the word Unoccupied in your policy as well. These two words are different and will apply to different exclusions in the policy. I'll define them here.
What is the definition of Vacant?
The home is unfurnished and not being used as a residence.
What is the definition of Unoccupied?
The home is furnished and the owner intends to return to the residence.
These definitions are general in nature and your policy may specifically define Vacancy and Unoccupancy. The several policies I reviewed, that are available in my agency, do not define these words specifically.
What your policy does say is that there are specific perils in which you wouldn't have coverage if your home was Vacant and/or Unoccupied. Generally, your policy will further state a length of time for which beyond this time you would not have coverage for the specific perils. Again, it's important to know this time frame from your specific policy as the length of vacancy or unoccupancy can be different by policy.
The first peril you wouldn't have coverage for in the event your home is vacant or unoccupied is the peril of Freezing. If you don't take reasonable care to maintain heat in the building or shut off the water supply and drain any systems of water then you won't be covered if your home is vacant or unoccupied. Please be aware that none of the policies I checked had a length of time exception for this specific peril. Freezing does and can happen in Arizona so it's important you maintain heat in the home and/or shut off the water supply to the home if you want to have coverage for damage caused by freezing pipes. (This can be found under the Section 1 - Perils Insured Against in your policy)
The second peril you wouldn't have coverage for in the event of vacancy or unoccupancy is the peril of Vandalism and Malicious Mischief. Here is where you'll find a length of time requirement that is specific to your policy. Most insurance companies will either use 30 days or 60 days. This means, if your home is vacant for more than the length of time specified in your policy and your home is vandalized you won't have coverage. If you moved out 3 weeks ago and you learn that your home was vandalized by some neighborhood kids your policy would cover your loss. If it's more than the time specified in your policy then the loss would be excluded and not covered. Also note, some insurance companies will include both words "vacant or unoccupied" which further limits coverage for Vandalism and Malicious Mischief. Some carriers that we represent only use the word "Vacant". This is critical to know if you are retired and travel for long periods at a time.
Here are a couple of examples:
The home policy offered by Allstate Vehicle and Property Insurance Company states that Vandalism and Malicious Mischief is excluded if your dwelling is vacant or unoccupied (emphasis added) for more than 30 consecutive days immediately prior to the vandalism or malicious mischief.
The home policy offered by Safeco Insurance Company of America states that Vandalism and Malicious Mischief, including fire caused by arson, or breakage of glass and safety glazing materials (emphasis added) if the dwelling has been vacant for more than 60 consecutive days immediately before the loss.
The home policy offered by Kemper Independence Insurance Company states that Vandalism and Malicious Mischief is excluded if the dwelling has been vacant for more than 30 consecutive days immediately before the loss.
As you can see from these examples that every policy can be different when it comes to how your home insurance would be covered if the home becomes vacant or unoccupied. If you're moving and your home hasn't sold or closed yet and there is a vacancy it's important to discuss with your agent how to best cover yourself in the event of a loss. If you travel for an extended period of time, 30 days or more, it's important to discuss your "Unoccupancy" with your agent to make sure you have adequate coverage while you're away.
It's always best to work with an independent insurance agency, like myself, who has many insurance companies to choose from so that you can find the right insurance coverage for your situation. You don't want to be stuck with no options!
Now, obviously I haven't read every insurance policy available in the market place so it's important to read your policy and question your agent or insurance company. If you're not receiving an adequate response from your agent please feel free to contact us. We'll gladly sit down with you and review the policy you have in detail and compare it to the many options we have available. Our office phone number is (480) 336-2707. And, you're always welcome to come by our office and visit. We're located just south of downtown Gilbert, AZ. Our address is 7 E Palo Verde St, Ste 11, Gilbert, AZ 85296.
Author Richard Morris
Richard Morris, an independent insurance agent in Gilbert, Arizona has been serving and helping Arizona families and businesses with all their insurance needs for over 26 years. If you’re in Gilbert, Chandler, Tempe, Mesa, Queen Creek, San Tan Valley, Scottsdale, or Phoenix he and his staff can help you with your family insurance plan. Visit his website at http://www.southwestpremierinsuranceagency.com to see all the ways he can help you with your insurance needs or call the office at (480) 336-2707 or toll free at (888) 907-9349. If you’re near Gilbert, AZ then feel free to stop by his office at 7 E Palo Verde St, #11, Gilbert, AZ. This is one block south of Elliot on Gilbert Road. Connect with Rich on Facebook, Google+, and Twitter.