In August and September, burglars snuck into 18 homes in towns near Concord, N.H., and ripped out their copper pipes. Three of the thefts occurred on the same block of one street, racking up damage that police estimated at $5,000 to $10,000.
The common element to these thefts was that the homes had no one living in them — they were in foreclosure or apparently abandoned or for sale — in all cases unoccupied. Their owners might discover, to their regret, that it could be hard to make a claim for the damage if their insurance policies exclude losses when a home is vacant.
Five things to consider in insuring — or rather, failing to insure — a vacant or unoccupied home:
1. Plenty of people need to consider this. The number of vacant homes in the U.S. is multiplying: There were 19 million of them in the first quarter of this year, according to the Census Bureau, which said 2 million of those were properties for sale, a number that’s about double the historical level.
"The prevalence of vacant or abandoned homes has become a bigger challenge due to the foreclosure crisis and the housing crisis that continues to work through the country," said Michael T. McRaith, director of the Illinois Department of Insurance and chair of the property and casualty committee of the National Association of Insurance Commissioners.
"There’s clearly a market need for property owners to have coverage that includes benefits for properties that aren’t occupied full time," he said.
2. How to define a "vacant" home can vary widely, depending insurance policy wording, McRaith said.
Typically, homeowners’ policies won’t cover claims if a home is vacant for 30 to 60 days — after that, your insurer may reserve the right to cancel the policy.
Thus, a vacant condition is not just of concern to the homeowner who gives up on selling his house and has to move out, but also to owners of vacation properties who are away for extended periods. McRaith said both should consult their policies and their insurers.
There’s a distinction between vacant homes and unoccupied ones, in the eyes of insurance companies: In a vacant home, the resident has moved out and taken his or her belongings; in an unoccupied home, the furnishings and belongings are there, though the resident is elsewhere, according to the Idaho Department of Insurance, which said such wording in a policy could be important to individual coverage.
3. You may go away from that house thinking you’ve left it secure and looking cared-for and with little risk, but the list of "what-ifs" is a long one. Not only are there the increasingly common copper-filching burglars, but thieves look to vacant homes as sources of home electronics, personal valuables such as jewelry, and even major appliances.
Then there’s the problem of no one being there to call for help if certain problems arise, McRaith said.
"Small problems in a home could be resolved fairly quickly if they were noticed by somebody occupying the building," he said. "For example, a leaky roof, a leaking water heater, radiators leaking, maybe even a gas leak — all of those things that are fairly standard homeowner issues can be significant issues if not dealt with properly."
Another concern is liability — i.e., what happens if unauthorized, unsupervised people in a house were to get hurt in an accident.
4. There are a couple of solutions for gaps in coverage, McRaith said.
One of those is to get a separate policy tailored to a homeowner’s needs, and the market for them seems to be humming. Foremost Insurance Co., for example, said it experienced a 47 percent spike in vacant-home policies in 2009, compared to the previous year, and in 2010 the company’s sales are up 18 percent, according to A.M. Best, which reports on the insurance industry.
Other insurance companies, apparently sensing an expanding market, are rolling out vacant-home coverage. American Integrity Insurance Co., for one, recently introduced such coverage targeted to absentee owners who are maintaining their properties, according to a Best report.
Another option is to get an endorsement from your insurer for your existing policy that provides coverage for a specific period.
5. If you won’t or can’t try those alternatives, another option is to find someone to live in the house while you’re away. If you rent out the home, however, you’ll probably need to consider a landlord’s policy that protects the structure, its contents and liability, according to the Insurance Information Institute, a trade group.
Another possibility is enlisting a house-sitting friend or relative, though you might want to consider checking with your insurer about possible coverage ramifications of that, too.
A source of last resort may be each state’s FAIR program, which provides insurance for properties when coverage is lacking in the regular market, though some states exclude vacant properties from their coverage.
