Vacant Home Insurance: Cost, Coverage & Providers
Vacant home insurance covers unoccupied homes for an extended period, and it typically costs 50% to 60% more than your traditional home insurance policy averaging around $2,170 yearly. Empty home insurance costs more than traditional home insurance because unoccupied properties have a higher risk of exposure to weather damage, theft, and vandalism. We evaluated several vacant home insurance providers and selected the five best options.
- Farmers: Best for people looking for a flexible, prorated policy
- Foremost: Best for a business with a long-term renovation project
- Vacant Express: Best for businesses with multiple vacant locations
- Steadily: Best for those looking for a fast, online quote
- Liberty Mutual: Best for those who want to keep their existing homeowner’s insurance
Farmers is a 100-year-old company that offers both personal and commercial lines of business. Farmers offers 12-month vacant home insurance policies. These policies can have landlord flexibility built into them so that the policy can switch from vacant home insurance to a landlord policy if the property becomes occupied.
Farmers is best for someone who wants to go with a trusted and established carrier and is looking for flexibility with their insurance. The 12-month policy has a prorated cancellation built-in for when the policy is no longer needed.
Foremost insurance has 65 years of experience in the specialty line insurance market, focusing on insuring products that many mainline carriers avoid. Its vacant home insurance is a 12-month policy with an agreed loss settlement and liability built into the policy. Foremost is financially strong, with an A rating by AM Best.
Foremost is best for someone who has purchased a fixer-upper and, either because of the scope of work or the available funds, they know it will be a lengthy renovation project. Foremost offers vacant home insurance coverage for up to four years.
Vacant Express is another specialty insurance company. Since 1978, Vacant Express has been focusing almost exclusively on offering vacant home insurance. It also provides related products, such as construction or short-term rental insurance. Foremost has an A rating by AM Best.
Vacant Express is best for businesses that have acquired multiple properties and are fixing them up simultaneously because they offer policies covering more than one location.
Steadily is a new insurance broker. It’s so new that it’s still raising capital through venture funding. However, it’s available in all fifty states. It focuses solely on landlord insurance policies and allows for vacancy periods. Its website provides a fast, no-obligation quote.
Steadily is best for a landlord looking to get insurance quickly for their property.
Liberty Mutual offers home, auto, life, and commercial insurance through a national network of independent agents. Liberty Mutual provides an endorsement of existing homeowner policies for any home that will be unoccupied for 30 days or longer.
Liberty Mutual is the best choice for homeowners who will be traveling but don’t want to purchase a new policy. Are you planning a through-hike of the Appalachian Trail? Consider adding an endorsement to your existing homeowner’s policy.
What Does Vacant Home Insurance Cost?
Like standard home insurance, vacant home insurance accounts for many factors when pricing the policy. These include the age and location of the home, building materials, improvements, amenities, outbuildings, and the total cost of replacing the structure. Due to the risk of having the home unoccupied, the cost is 50% to 60% higher than a standard homeowner premium.
Vacant Home Cost
The above list was compiled from the national average of home insurance premiums from a variety of reports ranging from mortgage companies, data providers, and the Insurance Information Institute. An average was taken from those reports. These numbers reflect a standard dwelling policy with $200,000 in coverage and a deductible of $1,000. The vacant home insurance cost reflects the standard increase of 50%.
Factors That Affect Vacant Home Insurance Costs
Vacant homes are susceptible to more risks because no one is present to monitor and secure the property. This is different from a vacation rental property, which is generally less expensive to insure. Additional factors that affect vacant property insurance costs include:
- Length of vacancy: The shorter the vacancy, the lower the risks, resulting in a lower premium
- Security system: Installing burglar alarms and other security measures generally yield discounts on the insurance premium
- Property Condition: The better your property is, the better your quote
- Neighborhood: If your vacant property is one of many boarded-up properties on the block, this will usually negatively impact your quote
- Property oversight: If your business is a property management company, are people regularly checking on the vacant property? Make sure to let your insurance company know.
- Replacement cost: Larger homes with nice amenities cost more to replace in a loss, increasing the amount of coverage required, thus driving up the cost of the premium
Vacant Home Insurance Coverage
Vacant home insurance doesn’t cost more because it provides different coverage from a homeowner’s policy. It costs more because of the risks associated with vacant property. The coverages provided are similar to what you will find on your typical homeowner’s policy.
Standard vacant property insurance coverage generally includes:
- Named perils: Covers losses from named perils such as fire, windstorm, or hail
- Vandalism: Graffiti and intentional damage to the vacant home
- Total loss settlement: Covers the cost of replacing the property
- Liability: Property damage and bodily injury to others while on the property
Vacant Home Insurance & How It Works
Carriers write homeowner policies with the understanding that you are living in the home. Whether the vacancy is because of a rental or renovation project, vacant home insurance provides coverage for an unoccupied property.
Vacant home insurance is often structured with flexible policy terms (three-, six-, and nine-month policies) to accommodate the nature of the vacancy and pro-rated cancellation. If your property is a rental and between tenants, many carriers offer vacant home insurance, which will transition into landlord insurance once the property is occupied.
Vacant Home vs Unoccupied Home
There is a difference between a vacant home and an unoccupied home. We break down the main differences below:
The home is empty and personal property has been removed
The home still has personal property inside of it
Utilities are shut off
Utilities are turned on
Typically, a vacant home is a rental property between tenants
Typically, the home is unoccupied for several reasons: home renovation, a lengthy vacation, or the owner may be hospitalized
There can be overlap on the above, for example, if the property is one you have recently inherited as part of an estate.
Who Needs Vacant Home Insurance
- Rental property investors: If you operate one or multiple rental properties, you already know that tenants come and go. If a tenant leaves and no one else is renting it, or the next renter has signed a contract that won’t start for one to two months, you will want to consider vacant home insurance to protect the property while it’s empty. Many carriers will write a policy that will transition into a landlord insurance policy once the tenant moves into the home.
- Fix-and-flip investors: Fix-and-flip investors generally work with empty homes for the duration of their ownership. Typically, during the purchase, renovation, and sales process, flipped homes are vacant the entire time, so a standard homeowner’s policy won’t cover it. Since this may be longer than 60 days, you will want to work with a carrier that can help develop a policy right for your specific business needs.
- Snowbirds: While traditional homeowners’ policies provide coverage while you are on vacation, most vacations don’t last more than 30 days. If you are a snowbird or a family with a second home on a lake, you will want to get vacant home insurance for your second home.
Suppose your home is unoccupied for an extended time, between 30 and 60 days. In that case, there’s a chance the insurance company could void your policy, and the property then becomes uninsured. While vacant home insurance costs approximately 50% more than your standard homeowner’s policy, the peace it gives you while you are away from home will be worth it.