Vacant Home Requires Different Insurance

Added March 7, 2007 by Ilyce R. Glink

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Summary: Often, insurance policies are written to cover homes that are exclusively lived in by the owner. If you're going to rent your property or the property is going to be left vacant, you'll need a different sort of insurance policy or at least a waiver from your insurance company. The typical insurance policies don't cover what happens to a home if no one lives in it.

Q: We decided to list our second house for sale and signed a 3-month contract. The property was vacant and we would stop by the house every weekend to check up on it.

Once the contract was up, we decided to take it off the market and rent it out.

When we returned to the house two days after the contract expired, the pipes had burst. The master bedroom, hallway, and guest bathroom were soaked in water. The ceiling had collapsed.

We filed a claim with our insurance company, only to find out insurance would not cover it due to the fact that the house was vacant and the heater was not on. (There had been a freeze warning.)

Can insurance companies do this? Our primary home is also insured by the same company.

A: Unfortunately, the answer is "Yes, they can." Please go back and read your policy.

Often, insurance policies are written to cover homes that are exclusively lived in by the owner. If you're going to rent your property or the property is going to be left vacant, you'll need a different sort of policy or at least a waiver from your insurance company.

Technically, you may have violated the rules of your insurance policy, which would give your insurance company the right to deny your claim. And as we all know, insurance companies don't want to pay out any more in claims than they absolutely have to.

For more information, please talk to a competent real estate attorney.

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