Personal or business properties can wind up vacant for a number of reasons and for various lengths of time. Often, the underlying causes for the vacancy can make this a stressful experience, and frequently this means that the question of insurance coverage can be forgotten. Regardless of whether this is your parents’ home and they’ve recently transitioned to a senior living community, or if it’s a business property that is suddenly vacant because the tenants moved out, your coverage needs to be adjusted to insure that coverage is in place and adequate to your needs.
Insurance companies place insurance on buildings based on the information you supply when you first take out the policy, and one of the questions is whether or not the space is occupied. Regardless of whether this means someone is living there, it’s rented to someone who is living there, or a business is operating there…….. the question ultimately is asking if someone is there for a substantial amount of time every day. Most policies include a clause that if this is not the case for more than 30 days, then the property is considered vacant and coverage is either invalid or adjusted down significantly. This is why it is so critical to make sure that your policy meets your needs when the status of your property changes.
There are just a couple of insurance companies that will write a policy for vacant property…..whether it’s a private home, a home that you rent, or a business property. Each has its own unique coverages and options, but essentially what each of these policies offers is:
*Liability coverage for what might happen on the property with no one there to supervise
*Personal/Business Property coverage for any belongings that might be stolen or destroyed
*Vandalism or Malicious Mischief coverage for acts against your property that are intentionally destructive
*Options for Replacement Cost, Agreed Loss, or Actual Cash Value coverage of the structure itself should
something happen like a fire where re-building or repairs are necessary.
*Water backup from Sewers and Drains
*Deductible options
….and depending on the company, quite a few other options like pro-rated cancellation options, renewal options, and discounts for things like new roofs, multi policy discounts, and security systems.
Vacant properties by definition mean that something has changed before you had the time to adjust, and this is stressful all by itself. A claim during this time that is denied or the settlement is reduced because you didn’t update your policy, makes a stressful situation significantly worse. Talk to your agent today if you have any questions about a property that you think may become vacant soon or are already to find out what kinds of options are available to you and the costs associated with each.
This post was written by Aaron Nicklay, Agent with Farmer’s Insurance. For more information on this topic and more and how Aaron can help protect your business, email him at anicklay@farmersagent.com or call (952) 229-5155.
