Insuring vacant dwellings

When is a home considered vacant?

Imagine a vacant house. You’re probably picturing something old and decrepit, right?

From an insurance standpoint, it’s important to remember that even a brand-new home can be vacant. If you buy a home but don’t move in right away, or if your rental property has no tenants living in it, insurance providers would consider it vacant. They will also consider it vacant when all the occupants have left the home with no intention to return. Contrary to common belief, the presence of furniture or personal belongings have no bearing on a home’s occupancy status.

Basically, a home with no one in it can be vacant or unoccupied, even if you leave stuff in the house.

Vacant is what we’re talking about here: the occupants have left (and don’t intend to return), while no new occupants have moved in yet. Unoccupied is the term for a house that’s empty, but the occupants do plan to return. For example, a vacation home is empty most of the year, but most insurance providers wouldn’t consider it vacant. Similarly, people often move out while their home undergoes significant renovations. This, too, would probably not fall under the vacant category. Of course, insurance for vacation homes or homes undergoing renovation has its own wrinkles.

In any case, it’s critical to inform your insurance provider about any changes in occupancy.

Home insurance for vacant dwellings

Home insurance providers always need to know if a home is vacant, because it’s an important consideration in calculating premiums (among other reasons).

Vacant homes face greater risks than occupied homes, which makes them more expensive to insure. If a home is vacant, there’s no one there to respond to potential issues, and those issues could quickly spiral out of control.

Frozen pipes are a common example in Canada. If a home is vacant during the winter, it’s susceptible to this particular risk. If the power goes out, or the furnace fails, the water pipes can quickly freeze and burst — causing thousands of dollars in damage.

Many providers require someone to check up on a home if it’s empty for more than a few days — whether vacant or temporarily unoccupied.

Some home insurance providers are willing to insure vacant homes, while others are not. That’s why it’s important to inform your insurance provider as soon as your home becomes vacant (their definition of vacant). If you don’t, your coverage could be void. If you aren’t sure what “vacant” means to your insurance provider, read your policy (you can find this in the section titled, “Definitions”) or contact your agent or broker for a quick and easy explanation.

Even if a provider does insure vacant homes, there may be additional restrictions attached. For example, a provider may exclude vandalism coverage for vacant homes. And, water damage is almost always excluded when a home is vacant, whether you have told your insurance provider about it or not.

As every provider treats vacancy differently, it’s crucial to understand how your own policy defines and covers vacant homes. It’s equally crucial to fulfill your responsibilities. That includes informing your provider if your home is empty, and ensuring someone’s visiting to check up on it during that time.

So, to sum up: yes, you can insure vacant homes.

For example, Square One offers coverage for vacant homes. Our coverage excludes water damage after a home has been vacant for 30 days, but glass and vandalism coverage remain, with only a slight increase in the deductible.

How to protect a vacant property

Even if your insurance provider has offered coverage for your vacant home, the best way to protect it is to avoid a loss in the first place. Here are a few tips for protecting your vacant or unoccupied home:

• Make sure the home looks occupied
• Keep the lawn trimmed and pick up any garbage or debris
• Close the blinds so thieves can’t see inside
• Don’t let your mail pile up
• Ask a friend or neighbour to check on the property at least once a week (and daily during the heating season)
• Install a timer so your lights turn on and off with the daylight
• Lock all windows and doors
• Consider installing a security system that allows you to monitor your home remotely
• Shut off the main water supply and drain the water lines, if you can’t get someone to check your home every day during the heating season

What temperature to leave a vacant home in Canada

In the winter, it’s important to maintain heat in a vacant home to prevent freezing pipes and other damage. The temperature inside the home should be around 16 °C, give or take a few degrees. It shouldn’t drop below 12 °C.

This is a good balance between paying hefty energy bills for an empty house and protecting it from harm. Remember, setting your thermostat too low can still cause frozen pipes, even if the furnace is running. This is more common in older homes with less efficient insulation: for example, the inside of your kitchen cabinets can get much colder than the rest of the room if the doors are closed. If you notice that the air in your cupboards is often a lot colder than the rest of the room, consider leaving them slightly open while you’re away so that warm air can circulate and prevent the pipes within from getting colder than intended.

Vacant homes vs. homes under renovation

Homes under construction or renovation usually fall under their own category of insurance and aren’t considered vacant dwellings. Any changes you make to your home fall into one of two categories: renovations or construction.

Smaller additions, like installing a new bathroom or fitting double glazing, are renovations. During such work you can often keep living in your home, and your insurance provider may just make a note of the changes and continue coverage as normal. Once work is complete you may actually see a decrease in your premium if the renovations include replacing things like old wiring, plumbing or roofing.

Larger jobs, where the home is rebuilt from the foundation up, are considered construction. This is the same as (and pertains to) building a completely new home. You can’t usually live on the property as there will be people (contractors, managers, etc.) coming and going frequently, and the home usually won’t be “occupancy ready” according to your municipal bylaws.

If you’re planning any changes to your home, be sure to contact your home insurance provider to ensure your property is covered throughout the process. They’ll make sure you have the right coverage and help adjust your coverage limits based on the changes you’re making. This may result in a slight increase to your premium, but if you fail to take this action and you suffer a loss, you may not have enough coverage for the renovations. And, most importantly, your home insurance may become void if you undertake renovations or construction without notifying your home insurance provider in advance.

Commonly asked questions

What happens if a contractor is injured while working on my house?

All reputable contractors will have worker’s compensation coverage and liability coverage. When hiring a contractor, it’s important to ensure that they’re qualified and insured.

There are many circumstances, however, in which a homeowner is liable for injuries to people working at their home. This is one of many reasons that homeowner’s liability coverage is important.

Is my property considered vacant even if I move in my belongings?

It’s a common misconception that the vacancy of a home is based on whether there’s furniture inside. This is false — vacancy is based on whether the occupants are planning to return to the home or not. If the occupants are gone and don’t plan on returning, insurers will consider the home vacant, regardless of furnishings or other belongings inside.

Are secondary or vacation homes considered vacant?

Any type of home can be considered vacant, it just depends how you use the property. Imagine someone purchases a new property as an investment. If they plan to leave it empty, not moving in or renting it out, it will be vacant. If they do rent it, or actually move in to it themselves (even part-time) it would not be vacant.

Vacation homes are harder to categorise. Many vacation homes only see use a few weeks out of the year. However, the owners haven’t “moved out” of the summer cottage when they leave it empty for the winter. Most insurance providers don’t consider vacation homes vacant while they’re empty, because the owners do plan to return. As long as you inform your insurer about how you use the home, they’ll help you ensure it has appropriate coverage.

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