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What you need to know about leaving your home vacant

95% of homeowners do not understand what happens to their insurance on the home when the house becomes empty or unoccupied. This is how homeowners find themselves with no coverage after submitting a claim and the insurance company learns the house was not being lived in at the time of claim.

Every homeowner's insurance policy is different, but one thing is for sure. Homeowners insurers will not continue to insure a home, if the home is not being lived in by the primary homeowner. A house that is completely vacant (moved out) will end insurance more quickly than other situations.

Right now, there are thousands of homes that have no insurance coverage, but the owners believe the house is fully covered because they just don't understand the provisions of their insurance policy.

We speak to people all the time that are simply not aware that they are risking everything. These are the most common examples of what we see on a daily basis:

• House in Florida sits empty for 90 days while the owners have moved to Texas. (In this case there was no coverage)
• A house in New York State is unoccupied for 72 days while the children decide what to do with the house of a deceased parent. (no coverage)
• A professor's townhouse in Maryland sits empty for 5 months while the faculty member is teaching a semester abroad. The neighbor looks in on the house every Tuesday. (no coverage)
• An expatriate is living in Hong Kong while his house back in Arizona is being lived in by a friend. He did not bother to tell the homeowners insurer and switch the policy over to a landlord policy. (no coverage)

The fact remains almost everyone in these kinds of situations do not understand the risks involved.

If there were a claim in one of these situations, the homeowners insurance company could deny the claim and refund a few months premium, canceling the policy. Also, what we see in many cases is the insurer paying the claim "as if the employee" had been living in the house, at a very reduced level of coverage.

For example, a washer hose leak is a common claim. If an owner had come home after work for example to find the hose leaking, the claim could have been contained. Instead, the owner is not living in the house and the hose leaks for 9 days until the owner's sister comes into the house to check on things. In this situation a $10,000 claim has turned into a $100,000 claim because now 3 floors are ruined and 12 of the walls are now infested with mold and rot.

However, the owner is shocked to learn that they are only eligible to receive $10,000 from the insurance company and the full extent of the damage is not being covered. Again, all of this assumes the insurer is generous enough to provide any coverage at all in this situation! In many cases, this claim would be totally denied, with the insurer claiming the house was vacant and the owner did not inform the insurance company of the situation. However, expecting a claim to be covered for $100,000 in this example, and receiving a check for 1/10th of this amount comes as a shock to the home owner.

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