Insurance on a house with no contents is called a vacant dwelling policy. Such policies cover unoccupied homes, which typically contain no furniture or personal property.
About Insurance on a House with No Contents
It's important to talk to your insurance broker or insurance company if your house will stand empty for more than 30 days. Some companies won't insure it, while other charge extra for unoccupied buildings.
It often surprises property owners that vacant houses cost more to insure than occupied ones. Many companies won't even cover unoccupied dwellings or homes without contents. The reason is simple: an occupied home has someone on the premises to report fire, theft, or leaky pipes. An unoccupied building, on the other hand, may be subject to vandalism, weather damage, or structural failures such as a broken pipe that result in expensive problems.
A home insurance policy covers more than contents; it covers the dwelling itself, which can be costly to replace. Whether a home has furniture left behind or not may not matter to the insurance company. They may still classify it as unoccupied and cancel the policy or add a surcharge onto an existing policy.
Coverage Under an Existing Policy
If you know that your home is going to be unoccupied and empty for more than 30 days, be sure to call your insurance agent or insurance company. Many policies have clauses that cancel the policy if a home remains vacant for more than 30 days. Every policy and company has different restrictions and coverage information, so you must check with your individual carrier to understand the exact restrictions on your current homeowner's policy.
Some policies allow for homes with no contents or unoccupied dwellings but tack on a surcharge. Remember that the insurance industry's fees are based on the likelihood of claims. A vacant house without any contents may be a vandalism magnet or experience neglect leading to catastrophic failure, such as the broken water pipe example cited earlier. The result is that insurance companies deem them riskier than occupied dwellings and charge accordingly.
Tips for Insuring Empty Homes
An empty home may indicate that the home is on the market or up for rent. If you're trying to sell your home but must move out of it before it's sold, here are some tips from insurance agents in the United States and the United Kingdom.
- Many insurance policies for unoccupied homes cover fire, lightning, explosions and aircraft damage only. Check your policy. If the house is near a body of water or in a flood zone, ask about flood coverage too.
- Empty homes attract kids and vandals. Ask about an umbrella policy for all of your property and talk to an agent to see if it can extend to trip and fall-type claims at the unoccupied property too. It might be a long shot, but it also may be worth it if you have substantial assets at risk.
- Maintain the property or hire someone to do so. A home without contents should be checked periodically. Hire someone local or ask a friend to check inside as well as out. Make sure they look in all the rooms, the basement and the attic. Any sign of water, insect or rodent damage should be addressed immediately. A little problem caught early can prevent large problems later, and unoccupied dwelling insurance may not cover such problems.
- Give specific instructions to the person you hire or ask to look after your home to call the police if anyone begins living in the unoccupied home. It's been known to happen and greatly increases the risk of damage, another reason why insurance companies don't like providing insurance on a house with no contents.
- Ensure that there's a minimum of heat on during cold weather to prevent freezing and burst pipes.
- Keep the outside of the property immaculate. The better a property is lit, the less likely vandals are to deface it. Curious kids won't deem it the local 'haunted house' if the lawn is mowed and the leaves are raked. Besides, if the house is on the market, you want it to look sparkly and clean to attract buyers.
- Try to live in the house as long as possible, even if you're moving out of state. If your spouse obtains a job in another state, consider living in the home until it sells while your partner gets settled in the new home. This reduces insurance expense and problems since the home is no longer empty or unoccupied.
Remember, insurance companies care only about the risks and rewards of insuring your home. If a house has no contents it usually means no one is living there, and that greatly increases the risks to the insurance company. They may charge more for your insurance or cancel your policy. Minimize the time your home remains empty, take steps to protect it if it is empty, and talk to your insurance agent or company about the options available to you.