Vacant home insurance may appear cheaper compared to standard homeowners insurance, but in reality, vacant homes pose higher risks and are more expensive to insure. Whether your home is empty due to ongoing repairs or while awaiting occupancy, it’s vulnerable to damage or vandalism without your presence to maintain or deter intruders. Opting for vacant home insurance can provide financial protection in case you need to file a claim. Bankrate’s insurance editorial team offers insights into vacant home insurance, including who needs it, how to acquire it, and additional details to help you understand its coverage.

Vacant home insurance is a specialized form of property insurance tailored for homes left uninhabited for an extended period, typically 30 days or more, although the duration can vary among insurance companies. Unlike standard home insurance policies, which often exclude coverage for vacant homes due to their elevated risk profile, vacant home insurance addresses the heightened vulnerability of unoccupied properties. Vacant homes are at greater risk of vandalism and may suffer more severe damage during storms due to the absence of immediate intervention to mitigate harm.

This insurance can be acquired either as an endorsement to an existing home insurance policy or as a standalone policy. When obtained independently, it typically takes the form of a DP-1 policy. It’s essential to distinguish this policy form from standard homeowners (HO-3) or rental property (DP-3) policies.

Moreover, it’s crucial to differentiate between vacant and unoccupied homes. Unoccupied homes, such as seasonal residences, are intended for eventual return by the homeowners. In contrast, vacant homes remain unused for an extended period without immediate plans for occupancy.

Each property insurance provider has its own approach to vacant home insurance. Typically, vacant property insurance, provided under the DP-1 policy form, safeguards the physical structure of your home from various perils, including:

  • Hail, fire, and lightning
  • Smoke
  • Windstorm damage
  • Explosions
  • Riots and civil commotion

It’s important to note that a DP-1 policy usually doesn’t include coverage for personal property or water damage. However, endorsements for vacant home insurance may extend coverage beyond what a DP-1 policy offers. These endorsements are added to standard homeowners policies. To grasp the diverse coverage options available, whether through a separate policy or an endorsement, it’s advisable to consult an insurance agent who can provide detailed insights tailored to your needs.

Every insurance provider defines a vacant home differently, often based on the duration of its vacancy. You might need vacant or unoccupied home insurance if you:

  • Recently purchased a house and won’t occupy it within 30 days
  • Inherited a property but don’t plan to move in within 30 days
  • Have listed your home for sale and removed personal belongings
  • Have relocated temporarily for renovation purposes
  • Are preparing to convert your home into a rental property

While vacant home insurance is typically optional for homeowners who own their property outright, financial advisors generally recommend obtaining coverage for financial protection. However, if you have a mortgage on your vacant property, your lender will likely mandate purchasing vacant home insurance.

Purchasing vacant home insurance mirrors the process of acquiring standard homeowners insurance. You may have the option to buy a separate policy or add an endorsement to your current homeowners insurance. Here are the steps to consider when purchasing insurance for your vacant property:

Before you start soliciting quotes, it’s beneficial to outline your insurance preferences and establish a budget. Consider factors such as whether you prefer a carrier with robust online account management or one with excellent customer reviews. If you’re on a tight budget, prioritize finding the most affordable policy. Having clear priorities simplifies the shopping process.

Once you’ve defined your insurance preferences, it’s time to explore insurance carriers. While the best vacant home insurance companies may not always offer the lowest rates, it’s worth checking if your current home insurance provider offers an endorsement or standalone policy. This could make you eligible for a policy bundling discount. If you opt for a separate policy, cast a wide net to find providers offering vacant home coverage in your state. Evaluate coverage options, add-ons, and available discounts.

Keep in mind that not every carrier offers this type of insurance in every state. Companies like Farmers, American Family, and Foremost are among those that provide vacant home insurance.

Once you’ve researched companies, the next step is to obtain quotes from them. For the most accurate estimate, contact an agent and provide details about your situation. They can advise on suitable coverage amounts, assist in selecting policy limits, and check for any available discounts. Aim to collect quotes from several companies to compare them and determine which offers the most suitable coverage for your requirements at the best rate. Keep in mind that vacant property insurance typically costs 50 to 60 percent more than a standard homeowners policy, so expect potentially higher estimates.

The final step is to complete the process of obtaining a vacant home policy or adding the endorsement to your existing policy to activate your coverage. If you’re transitioning from a standard homeowners insurance policy to a vacant homeowners insurance policy, it’s crucial to prevent any gap in coverage. Your insurance agent will assist you in understanding how to prevent such lapses and ensure a seamless transition.

Vacant homeowners insurance and unoccupied homeowners insurance are distinct entities. An unoccupied home refers to a property where the owner is temporarily absent but intends to return. Utilities are typically active, and furnishings may still be present. In such cases, a standard homeowners insurance policy usually suffices for coverage.

Conversely, a vacant home denotes a property that is currently unoccupied due to reasons other than seasonal absence. This could include a home sitting on the market after the owners have relocated, undergoing extensive renovations, or awaiting new tenants in the case of rental properties.

Consulting with a licensed insurance agent to discuss the specifics of your situation is essential for determining the appropriate type of homeowners insurance for your property.