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What to look for in a vacant home policy:

Every insurance company is different in what they can offer a homeowner with a vacant home. Unfortunately, if you don't find the right coverage you can end up with an insurance policy that does not closely resemble the strength of coverage you had when you lived in the house under your old homeowners insurance policy.

We Offer The Following Policies: Vacant Homeowners Insurance Policy, Landlord / Tenant Policy, Boarded Home Insurance, Builders Risk Insurance, Business Condo Insurance, Manufactured Home Insurance, Vacant Condo Insurance, Vacant Lot Insurance, Vacant Row home Insurance, Vacant Town House Insurance

In most States, most single family homes are insured under a coverage form called HO3 or HO5 which for the most part affords the insured very good insurance protection. In many cases when a home owner calls their insurance agent or existing insurance company to obtain vacant home insurance, they are not getting the level of coverage they would expect.

Most insurance companies offer what is called a dwelling policy to an applicant that desires insurance on a vacant house or vacant building. Here are two critical facts anyone looking at this insurance needs to know.

First, a dwelling policy is not an all risk policy. A dwelling policy is what is called a "named perils policy" and will only pay a claim if one of the following perils are the cause of damage (or cause of loss) to the house:

Fire, Lightning, Windstorm, Hail, Explosion, Aircraft, Auto / Vehicles Damage, Smoke, Riot

The basic policy normally does not include vandalism or malicious mischief. In most dwelling policies you are covered for 8 or 9 "causes or loss" or perils. An all-risk policy on the other hand, covers for all possible causes of loss, foreseen and unforeseen, that are not specifically excluded by the insurance policy. All insurance policies have exclusions. If the cause of loss is not on the exclusion list you are covered under an all risk policy. However, under a named perils policy like a dwelling policy, if the cause of your loss is not on the list, you have no coverage.

Second, a dwelling policy is not a replacement cost policy. This means if something needs to be replaced due to loss (damage), you will not receive a check from the insurance company enabling you to replace the item with a new item. In other words, depreciation is taken into affect. The best way to demonstrate this is with a real world example, in this case involving damage to kitchen cabinets.

Let's say there were oak cabinets destroyed in a kitchen fire. Under most HO3 or HO5 homeowners policies (regular homeowners policies available to families living in the home), the insurer would pay for new kitchen cabinets of the same kind and quality (oak) including installation and labor charges.

Under most dwelling policies (again, the vacant policy offered to most homeowners) it may be an "ACV" ( actual cash value ) policy and if new oak kitchen cabinets would cost $20,000 you may receive a check from an insurer for $10,000 after they take into consideration the depreciation on 15 year old cabinets.

Related Information: Vacant Homeowners Insurance Policy, Landlord / Tenant Policy, Differences Between Policies, Policy Features, Policy Specifications, Insurance Programs, Vacant Lot Insurance, Vacant Condo Insurance, Builders Risk Insurance | Boarded Home Insurance | Business Condo Insurance | Manufactured Home Insurance | Vacant Row Home Insurance | Vacant Townhome Insurance