insurance on an unoccupied house

foggyjNovember 16, 2010

We may be in the situation of having our house stay empty until it's sold. Our homeowners insurance agent says they don't insure an unoccupied house, but will refer us to another company.

What information should we know about insuring an empty house?

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sudiepav

When we did that, we were referred to another company also. it was about 3x what we paid before. I understand that insuring an uninhabited dwelling is very pricey. Maybe you can comparison shop???

    Bookmark   November 16, 2010 at 6:52PM
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foggyj

Thanks for the response. We haven't gotten any figures yet. I'm concerned about vandalism of course too.
We really don't want to have to rent this place out, but if it may be a necessity.

    Bookmark   November 16, 2010 at 8:58PM
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kats_meow

Remember if you rent it out you will need insurance that covers landlords not just regular insurance for your residence

    Bookmark   November 17, 2010 at 2:07AM
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ncrealestateguy

"I'm concerned about vandalism of course too."

So are the insurance companies.
Good luck.

    Bookmark   November 17, 2010 at 6:52AM
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david_cary

My sister had a friend live there for free just to save on insurance with the side effect of having someone watch out for things. The house was on the market so with the free rent came the responsibility to keep it clean and leave as needed.

I believe it was a college student who lived with his parents next door. So he got some extra breathing space for very little inconvenience. My sister could kick him out anytime and save thousands on insurance.

    Bookmark   November 17, 2010 at 1:07PM
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foggyj

david-that's a great idea. Thanks.

    Bookmark   November 17, 2010 at 6:33PM
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kats_meow

It is a great idea....but it may or may not work if you actually have a claim. The policy may require that the home be owner occupied to be covered. The friend, neighbor, tenant is not an owner. Don't assume that just because someone is there that the policy is covered. Check carefully to find out if it must be occupied by an owner. Check with your insurance agent.

    Bookmark   November 17, 2010 at 7:07PM
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foggyj

Good point. I was wondering...due to the fact that I'm not "renting" the house, but someone is staying there free of charge, what the liability would be. I'll bet there would be a legal field day with something like this.

What if I hire someone to stay in the house until it's sold?

    Bookmark   November 17, 2010 at 9:21PM
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david_cary

Yes - switch your policy for sure. Sometimes you need to shop around but landlord policies are not expensive(Your own company may not be the best deal)

    Bookmark   November 18, 2010 at 5:04AM
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brickeyee

"Our homeowners insurance agent says they don't insure an unoccupied house, but will refer us to another company.
What information should we know about insuring an empty house? "

I would ditch that insurer immediately.

Many policies limit vandalism liability on houses vacant for more than a month or two, but not insuring at all means it is time for another company.

Allowing someone to live for a very low rent might be a worthwhile trade off.

    Bookmark   November 18, 2010 at 2:05PM
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foggyj

We were just told by our agent that as long as the empty house is being actively shown by a realtor, that we would remain covered, excluding: vandalism, and theft. We may ask our friend to "house sit", in the evenings.
Thanks for your responses.

    Bookmark   November 18, 2010 at 3:45PM
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david_cary

foggy - I would never trust a RE agent on insurance questions. This is probably one of those areas to be OCD - liability is nothing to sneeze at. It may vary from area to area but in CA at least, once the house has been on the market for a specific time, it has to be declared unoccuppied.

Now if the RE agent is willing to put it in writing and tell you that his insurance agency will cover in the event he is wrong, then sure. But I am sure that a RE liability insurance kicks in for RE questions not insurance issues.

    Bookmark   November 19, 2010 at 7:28AM
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terriks

Ditto what David said. I'm not sure I would trus an agent at all who is giving me advice outside of their field.

    Bookmark   November 19, 2010 at 11:54AM
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foggyj

OOPS,,my mistake. I did not specify what type of agent. It was our homeowners insurance agent! I would assume that if there is a "housesitter" here, that would qualify as occupied. If someone is staying overnight in the house, that's occupied and therefore covered. (?) I have to ask the insurance agent.

    Bookmark   November 19, 2010 at 1:08PM
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mariend

Whatever you do get it in writing. An agent might tell you anything, but the company may not honor it.

    Bookmark   November 19, 2010 at 10:56PM
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ottawavalleygardener

This ... "Whatever you do get it in writing. An agent might tell you anything, but the company may not honor it."

I find it hard to believe that your house would be covered just because it's actively being sold. Is there a time limit? If it's on the market for 2 years, it's still covered? My sister slept at their house when it was for sale to keep full insurance coverage (the rest of the family slept in the new house)

I see that vandalism or theft isn't covered for you with the house empty - which could be a concern.

    Bookmark   November 20, 2010 at 6:54AM
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foggyj

We were told we would have to look elsewhere for insurance for vandalism and theft. Well, that's the main reason we would need coverage! So we have to call around to see first, who even offers it, and then, what the outrageous fee might be. I guess as long as we pay the premium, they'll cover it. DH is dragging his feet on this.

    Bookmark   November 20, 2010 at 11:35PM
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kats_meow

foggyj -- You can't go by what an insurance agent says in terms of what the policy covers. You need to read the policy. Of course, getting something in writing from the agent, may be helpful if they give you wrong advice they can potentially be liable (that is a complicated issue and depends on your state's law and the facts).

It is more expensive to insure a vacant house but I priced it and it wasn't totally outrageous either.

    Bookmark   November 21, 2010 at 5:05PM
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foggyj

kats, thanks for the response. I'd feel alot better if I knew the house was insured for window breakage,etc., while vacant. We'll be in another state, so I assume we'll need a property management company to look after things here. Unless we have a miracle happen, and this house sells in 3 months. We have been told to rent the house for a year and see if the market improves. We don't want to do that, and be an absentee landlord, etc.

    Bookmark   November 21, 2010 at 9:54PM
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rafor

This is interesting: we had our house on the market in OR starting last Christmas. At the end of January we moved across the country to our new house. It never dawned on me to contact our insurance agent. House sold in March. I had called the agent just before we got the offer to find out about changing our policy to just cover the house since the contents were all out. I was told by State Farm that they didn't have policies for that! So I told her she could just cancel the existing policy on the closing date. But I would have considered having my son live there temporarily if it had become and issue.

    Bookmark   November 22, 2010 at 7:05AM
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brickeyee

"We'll be in another state, so I assume we'll need a property management company to look after things here. "

Or a really good RE agent.

    Bookmark   November 22, 2010 at 1:12PM
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