Your ‘vacant’ and our ‘vacant’ may be totally different things.
While the definition can take on different meanings, the term vacant in your insurance policy should be taken seriously to avoid gaps in coverage that could result in unwanted uninsured losses.
Often when we think of vacant we think of old dilapidated buildings, unoccupied for some time or hotels that still have a room available for a nights stay. In the world of insurance, vacancy happens fast and you take on immediate risk if not prepared.
Jack and Jill have a home rented to a tenant that has given them notice informing them they will be moving out at the end of the month. Since the tenant moved out they have been scrambling to get the place painted and cleaned up but they don’t have any prospective tenants.
Little do they know… The day the tenant moved out with no intention of returning, the home is now considered vacant and coverage has already been reduced significantly. In fact, with most insurers coverage is immediately reduced to exclude losses from burglary, water damage and vandalism including glass breakage. And, after 30 days there is no coverage at all!
You can imagine their shock and anger when they call their broker only to find out their broken glass and vandalism claim is not covered because the home is considered vacant by the insurance company.
Time to get creative
Now that we know the insurance policy can limit the types of losses it insures, what do we do
about the burglary, water, and vandalism exposures? You can start by turning off the water and flushing the toilets. If it’s wired for an alarm, make sure it’s set and consider having it monitored. Put the lights on timers and vary the times at which you come and go. You may even want to consider moving in temporarily to ensure all the coverage is maintained greatly reducing the possibility of an uninsured loss.
If your rented home or condo is going to be vacant for longer than 30 days make sure you contact your broker to arrange for coverage. We may also be able offer some advice that can help eliminate a claim from happening. For more information on your current insurance situation please give us a call to discuss.