Insuring a vacant home: If you leave town, you might not be covered

Mary Lou Jay

Extended travel, an elderly person's death or long-term hospitalization, a slow housing market -- there are many reasons why homes that had been occupied are left vacant for months at a time.

What many homeowners don't realize, however, is that their homeowner's insurance policy probably will not cover their losses if a fire, theft or other incident occurs when the home has been vacant for more than 30 days.

The U.S. Census Bureau says 14 percent of the housing units in the country were vacant at the end of the third quarter of 2010. While some seasonal vacancies are normal beach houses in January, for example), 11 percent of the vacant units were intended for year-round living.

It's understandable that insurers are reluctant to provide insurance for homes left empty for more than a month at a time. The risk of people stealing from a vacant house is much greater, as is the possibility of someone being hurt while breaking into the home.

Then there are home hazards that can go undetected. Washing machine hoses can break or water pipes can freeze during a cold snap, especially if the heat is turned down to reduce energy costs. The ensuing floods not only can ruin carpet and flooring but also can leave a residual mold on the walls that spreads because no one's there to notice the damage. A small fire that starts in electrical wiring could quickly burn out of control if no one's there to hear the smoke alarm and notify authorities.

If you must leave your home empty for an extended period of time, check with your insurer to see if it will offer vacant home insurance. Even if the insurer is willing, expect to pay more, with premiums going up by 50 percent to 60 percent, according to the Insurance Information Institute. And read the policy carefully. Some coverage likely will be reduced, and some types of damage may be excluded altogether.

Your insurer also may require you to install or maintain an alarm system, install heavy-duty locks in doors and windows, or take the steps to winterize your home turn off the water, keep heat at a minimum level and so forth).

To avoid the extra cost and keep the house occupied, you may consider renting it out. But your usual homeowner's insurance won't cover you in that case, either. You'll need to have tenant/landlord coverage in place.

If your insurer won't keep coverage on your vacant house, you may want to consider a policy from insurers that specialize in vacant home insurance. Foremost Insurance Group and Vacant Home Insurance both offer extended coverage for empty homes. Be sure to carefully read any vacant home policy, whether it's from your current insurer or from any other insurance company. The only true way to compare costs of vacant home insurance is to understand exactly what the policy covers and what it excludes.

See how much you could save today on your home insurance. Get your free home insurance quotes today!