Consider this very common scenario: You’ve been living in a home for five years, but have decided to upgrade to a bigger, nicer home across town. Your old home hasn’t sold yet and is still listed on the market. Since you’ve already taken possession of your new home and have excitedly moved all your contents in, your old home is now left vacant temporarily.

How has this scenario affected your home insurance? Also, what are the risks in leaving a home vacant?

What is a vacant home?

What exactly constitutes a vacant home? With almost every insurance company a vacant home refers to the circumstance where, regardless of the presence of furnishing and contents:

• All occupants have moved out with no intention of returning to take up residence at the dwelling.
• In the case of a newly constructed dwelling, no occupant has taken up residence. There could however be a policy in force called “building under construction”, which would be converted to a standard homeowner’s insurance policy once you move in.

These two circumstances are not taken into consideration if you are away on vacation and are planning on returning to your home.

dealing with this scenario

In the scenario described above, most insurance companies will allow a certain grace period for your home to sell (typically 30 to 60 days). If however, the home does not sell within that time frame the policy form could be switched from a standard homeowners, to a vacant dwelling policy. With vacant dwelling policies, coverage is most often reduced (excluding water and vandalism coverage) , and premiums will increase due to additional exposures with vacant homes.

Every insurance company will respond to this type of scenario differently, so it’s absolutely important that you contact a HMS broker so we can advise you of the best course of action.

personal liability, maintenance and security

If you own a home or a parcel of land you are personally liable for anyone who comes onto your property – it’s called occupiers liability. In the case of a vacant home, lets say for example during the winter months a mail carrier slips on a patch of ice at your front door, an area that you haven’t been clearing since nobody is living there. This mail carrier could be seriously injured and may pursue a lawsuit against you. The liability portion of your home insurance policy would protect you in this scenario.

It is also important to maintain and secure your home while its vacant, to prevent burglary and vandalism. Installing a security system or motion sensor exterior lights is a good idea. Also, turning off your water and draining the lines can prevent a major water claim. If nobody is in the home to notice a water leak it can escalate quickly.

In summary

If a home that you own becomes vacant, with no intention of returning, please give your HMS Insurance representative a call. We can review your insurance policy and recommend the right course of action for the company you’re with, and also useful loss prevention tips.