The Risks and Insurance Needs of Vacant Properties

Back in 2018, it was reported that the number of Vacant homes in the United States topped 1.5 million single-family homes and condos, representing 1.5 percent of all homes nationwide. While this may represent a small number of units, it also represents the potential for liability issues that are unique to vacant properties.

Many of these houses have been vacated by owners who have moved on to new homes, leaving their vacated home behind without selling it. This creates a major insurance problem as the potential for home invasions rises significantly and after 60 days of vacancy, the homeowners’ policy automatically does away with important coverages.

Vacancy and Insurance

Most homeowners insurance won’t continue on after 60 days, as mentioned above, and if a policy is canceled or not renewed for vacancy reasons, only a number of personal lines insurance wholesalers would be willing to offer coverage. Even then, the coverage may be very limited but with a reasonable premium.

The best choice for homeowners when it comes to handling exclusions or restrictions is to keep furniture in it or rent it out to someone so it’s not considered vacant. If there is no way to avoid vacating the home completely, homeowners still have two types of coverage they can pursue. There are surplus lines carriers who can handle this or specialty companies who specialize in this coverage.

A typical vacant property insurance policy runs the homeowner one-and-a-half to three times the cost of a property insurance policy. This may vary due to the increased risks associated with owning a vacant home. It’s important to notify your personal lines insurance wholesalers representative immediately in order to avoid major coverage loss.

Vandalism and Other Risks

Because there is a greater risk for home that’s vacant to be vandalized than an occupied home, insurance is usually a bit more than traditional insurance when it comes to cost. When a homeowners insurance coverage lapses for those who own a vacant home, they still have to pay for the damage themselves, putting an emphasis on the importance of good coverage.

If a home is vandalized or broken into, it hurts the chances for it to be sold at some point or at least hurts the overall resale value when it’s on the market. Homeowners can reduce their chances of having a major loss from break-ins, for example, by installing a security system that notifies them in real-time of any potential hazards. For risks such as fire or water damage, having a central alert system installed to monitor the home’s integrity will keep it safe.

Here are a number of other risks to look out for:

  • Lightning damage
  • Windstorm or hail damage
  • Smoke
  • Sprinkler leakage
  • Sinkhole collapse
  • Squatters

Regardless of how they attempt to stay on top of risks, having the right coverage offered up by personal lines insurance wholesalers, such as Mavon Insurance, can help to limit overall risk down the road.

About Mavon Insurance

At Mavon Insurance, we pride ourselves on our unique approach to insurance. We focus on integrity, communication, professionalism, respect and gratitude to help our clients succeed and place business in specialized markets. For more information about our products, or to become an agent, contact us today at (855) 248-1480.