Vacant Home Insurance: Do You Need It? What Does It Cover?

Vacant home insurance covers homes that have no belongings inside and are not being lived in. If you own a home that is empty for some reason, you might need this type of insurance.

Homeowners insurance is designed to protect your primary residence against financial losses associated with theft, fire, and other covered perils—but it's possible that your standard policy may not be sufficient to cover a property that is vacated. If that's the case, your insurance provider might require you to purchase this coverage.

What Is Vacant Home Insurance?

To understand whether you need vacant home insurance, it helps to know what it is and when it may be necessary. Vacant home insurance can be purchased as its own policy or as an add-on endorsement to an existing homeowners insurance policy. It is designed to protect homes that are vacant for an extended period. This differs from traditional homeowners insurance, which covers you for as long as you own and live in the house.

The time required for a home to be considered vacant can depend on the insurance company. For instance, some insurance companies may deem a home vacant if no one lives there for at least 30 days. Other insurers may extend this to 60 days or more before a home is considered vacant.

What Does Vacant Home Insurance Cover?

Vacant home insurance is designed to offer protections similar to a standard homeowners insurance policy. For example, your vacant home insurance policy may cover you for damage from:

• Theft
• Vandalism
• Fire
• Explosions
• Wind
• Hail
• Lightning

Your policy should spell out a complete list of covered perils and mention any exclusions from coverage. Vacant home insurance can cover the most essential types of damage that could occur when no one lives in a home, though it doesn’t cover everything.

Vacant home insurance policies can come with flexible terms ranging from three to 12 months, depending on the insurer. Your insurance company may have specific guidelines regarding the types of homes that can be covered. For instance, you may be able to get vacant home insurance for up to a four-unit dwelling or be limited to insuring a single-family property.

A vacant home represents a higher risk to insurance companies than a home occupied full-time. That’s because with no one there to keep an eye on the property, it’s more likely that damages related to vandalism or other mischief could occur. And without someone performing regular maintenance and upkeep, the risk of water and fire damage also increases.

If you need vacant home insurance for an older property or one that wasn’t appropriately maintained before you bought it, you might be faced with an increased risk profile and higher premiums.

Who Needs Vacant Home Insurance?

Vacant home insurance is typically something you only need in specific situations where a home you own will be empty for an extended period. Some of the situations that may require vacant home insurance include:

• Selling a home that you no longer live in because you’ve moved into a new property
• Owning a rental property that sits vacant during the off-season
• Performing extensive renovations or repairs on a home that makes it temporarily inhabitable
• Being hospitalized for an extended period for medical care
• Owning a vacation home that you only use a few months out of the year

You may also need vacant home insurance if you’re on active duty military service or traveling for an extended period. Remember, though, for the home to be considered vacant, it typically means that it has to be completely emptied of all personal belongings.

How to Purchase Vacant Home Insurance

Before purchasing vacant home insurance, it’s important to decide if you need a separate policy or whether you can add an endorsement to an existing homeowners insurance policy instead. An endorsement can be used to modify a current policy to cover the home for temporary vacancies.

For instance, say you own a rental home, and your tenant has given their notice. You expect it to take a month or two to find a replacement tenant and get them moved in. You may be able to use an endorsement to alter your current policy’s coverage until the home is occupied again. 

The next step is comparing rates and coverage options for vacant home insurance policies. Every insurance company is different when it comes to factors such as:

• Property types
• Vacancy reasons
• Covered and non-covered perils
• Coverage limits
• Premiums and deductibles
• Coverage terms
• Status definition (such as “unoccupied” compared to “vacant”)

In terms of what vacant home insurance can cost, this also varies based on the insurance company and your policy details. If you own a four-unit rental property, it will likely cost more to insure compared with a single-family vacation home. Fielding quotes from multiple insurance companies can help with finding a policy at an affordable rate. 

There are some things you can do to reduce the home’s risk profile and help make a vacant home policy less expensive. Installing smoke alarms, carbon monoxide detectors, and/or a security system could qualify you for discounts the insurer offers. Having someone keep up with outdoor landscaping and maintenance or check on the home regularly could also help reduce the risk to the insurer and bring down your premiums.

The Bottom Line

When purchasing insurance to cover a vacant home, consider carefully how long you’ll need it. This can be tricky if your home is listed for sale and you’re waiting for a viable offer. If you’re purchasing a vacant home that you eventually plan to rent out, ask your insurance company whether the policy can be converted to a landlord policy once the property is occupied. These tips can help you avoid paying for more coverage than you need or the wrong coverage type.