Getting Insurance for Vacant Home

pink_overallsJuly 5, 2010

Can anyone give me advice on how to insure a property on the market that's unoccupied?

Our regular insurance company told us they do not insure vacant properties, and gave us the name of a local company that did. We bought a 6-month policy referred to as builder's insurance to cover the condo we bought to sell. We paid about $350 for the insurance, realizing we'd have to pay another $350 for another 6 months. We remodeled for a month, staged it, kept the water and electricity on, listed with a realtor, and checked the property almost daily.

Then a toilet malfunctioned (after a realtor showing on Friday afternoon), but no one knew, and by Saturday morning the unit was flooded. Our realtor and the damage remedial professionals she recommended assured us that insurance almost always covers this sort of thing.

Surprise. They don't. Our policy doesn't cover water damage. It covers liability and fire, not theft, wind damage, etc, etc. We still don't have a final bill, but to dry out carpeting (lifted and air dried), replace baseboards, and replace some drywall sections, our bill will be around $7000.

What do other people do to protect themselves when they have a vacant property for sale?

My advice to others is to read every page of your inch-thick insurance policy. It's an easy read -- mostly just lists of what's excluded!

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Could the realtor or the person he/she was showing the property flushed the toilet, and not realized it was stuck? Or put something down? Usually builder's insurance covers only the materials, fire and liability and we had it while we were building, but did have additions for wind etc because of where we were building. Who were the damage remedial professionals the realtor recommended? Could you go to small claims court to recover part of this due to what they claimed they thought was covered? Just some things to check into.

    Bookmark   July 5, 2010 at 5:39PM
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Vacant property for sale isn't a new thing, but it is on the increase. There are insurance companies out there that will insure a vacant property, but full coverage is very pricey. Some will cover the issues you encountered, others not. When shopping for insurance for vacant homes it is important to read the fine print, compare apples to apples. You may think you're getting a good deal til it's time to put in a claim. So know what you're paying for. $700 for a full year of coverage is not a lot for this type of insurance so it doesn't surprise me at all that it wasn't full coverage. Full coverage will cost you much much more and may not be available in all areas or on all homes.

    Bookmark   July 5, 2010 at 5:41PM
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I got a quote for vacant house insurance awhile back and it was several times what you paid and this was for a not very expensive home.

    Bookmark   July 5, 2010 at 10:13PM
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We insured a vacant house as rent property which was not a stretch because it was going to be a rental if it didn't sell soon. Our insurance agent suggested it. I say suggested because he told us "this is what you can do" without actually recommending it.

    Bookmark   July 6, 2010 at 11:34AM
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Most home owner policies don't cover water damage. You probably would have been out-of-pocket even if you had home owners coverage.

Always turn the water off in an unoccupied home. Turn it on only for inspections and such. Be there when it is turned on and off.

If you have it turned off and a Realtor turns it on and leaves it, they will be liable for any damages.

    Bookmark   July 7, 2010 at 8:29AM
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"Most home owner policies don't cover water damage. "

Be careful about the source of the water.

Flooding (rising water from the exterior of the building) is not normally covered, but leaks from roofs, broken windows, and plumbing failures often is.

A common thing is for the vandalism and broken window coverage to terminate after 30 days of vacancy leaving fire and other protections in place if you exercised reasonable care.

Best to read the policy.

    Bookmark   July 7, 2010 at 9:11AM
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I think you will find that many if not most companies are now excluding water damages from any cause.

But as you say, it's best to read the policy.

    Bookmark   July 7, 2010 at 9:35AM
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Our home owner policy does cover plumbing failures....but there is a very low limit of $2000 for damages. Our neighbor's policy also covers it, again with a limit. They had a plumbing issue while on vacation and came home to find all the flooring etc. ruined. Insurance covered a very small portion of the damage.

    Bookmark   July 7, 2010 at 11:42AM
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It is not usually very expensive to have limits increased.

You can tell how often a problem has occurred by how inexpensive the insurance is.

If it was a common problem the insurance would be VERY expensive.

    Bookmark   July 7, 2010 at 2:56PM
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When I converted my old homeowner's policy to a vacant property policy, the premiums more than doubled for less coverage. No coverage on water damage, but wind damage is covered. Vandalism was an $80 dollar rider, but no credit for having an alarm system.

Any personal property I have there is covered under my homeowner's policy on the new house.

    Bookmark   July 7, 2010 at 4:35PM
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Hi pink_overalls, you might want to check The HartfordÂs plans. We have our car and home insurance with them. TheyÂre a sound company, good with claims, but IÂm not sure if they insure vacant houses.

    Bookmark   July 14, 2010 at 8:33AM
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