How to Know When You Should Insure a Vacant Property

Joe Polyak April 11, 2019

Welcome to part two of our discussion on insuring properties. I’m joined again by Roger Heighton of Farmers Insurance, and today we’ll be talking about insuring vacant properties.

When people buy a vacant property, they sometimes don’t think to tell their insurance agent. People should be honest with their agent, though, because most home insurance policies have a specific clause in them. This clause states that if the property is vacant for more than 30 or 60 days, it will lose certain coverages—vandalism, malicious mischief, etc.

If you have a vacant property, it’s likely that nobody is attending to it, which also means that anybody could come in and damage it. Under most standard home insurance policies, that damage wouldn’t be covered. However, you can get coverage specifically for vacant properties.

Common vacant properties include the property of the deceased; their assets may go into probate to be liquidated. The estate can take a while to be cleared for sale, so property can sit vacant for years.

When there are still items in the home, their coverage can vary from company to company, so it’s important to speak with your insurance provider. Exclusions may apply, but there are ways to handle them. Remember, you certainly don’t want coverage to be denied because you failed to disclose that the property was vacant.

When purchasing a home in order to flip it, only your agent will know how it should be insured. There’s no one-size-fits-all answer, but being honest with your insurance company is the best way to insure any loss. There’s no need to bring anything up if you’re simply repainting, but tearing down all the walls? That’s a different story; you’d want a course of construction or builders risk policy.

I’d like to thank Roger for once again giving us some great insight. Feel free to give him a call at 650-692-1484 or email[email protected]. If you have any other questions or need more information, reach out to me. I look forward to hearing from you soon.