Insurance on a vacant house?

[yoopermom]

We're looking at buying a new home, which means our existing home would be vacant until sold. I was really surprised when my insurance agent told me that they do NOT insure any vacant home, that I would have to go to an outside company for it, and that it would probably be expensive. (She said that they also don't cover rentals, aka if we rent out our vacant house.)

Fastforward to yesterday, when I was talking to a recently widowed friend who bought a new house/has her old one up for sale. She got her homeowners renewal notice, and is horrified, because the policy on the now vacant house went up from $400 to $2K a year!

We are in MI, which, of course, has horrific amounts of empty/vacant/ foreclosed on homes, but still....

So if you have any experience with insuring your vacant house, please share!

TIA!
Terri

 

[cglaura]

We're looking at buying a new home, which means our existing home would be vacant until sold. I was really surprised when my insurance agent told me that they do NOT insure any vacant home, that I would have to go to an outside company for it, and that it would probably be expensive. (She said that they also don't cover rentals, aka if we rent out our vacant house.)

Fastforward to yesterday, when I was talking to a recently widowed friend who bought a new house/has her old one up for sale. She got her homeowners renewal notice, and is horrified, because the policy on the now vacant house went up from $400 to $2K a year!

We are in MI, which, of course, has horrific amounts of empty/vacant/ foreclosed on homes, but still....

So if you have any experience with insuring your vacant house, please share!

TIA!
Terri

This is standard practice because a vacant house is more likely to have potential damage...leaks or broken pipes not immediately noticed, burglaries, poor ventilation leading to mold buildup, etc.

I think if you can show someone is living there a % of the time then you can keep the insurance as is. So you or spouse or a trusted family member could stay there x number of days per week/month, whatever your insurance requires.

 

[Nette]

I bought a vacant home insurance policy on my (late) dad's house last nov. $1200 per year for 90K total loss + 10K rider for vandalism. I had to buy it from a company other than my normal insurance company because they don't issue vacant home policies either... (USAA -- got the vacant home policy through Foremost)

Too bad I didn't buy it earlier because the outdoor A/C unit got stolen. Would have been nice to get that replaced for less!

All in all, even though it was expensive, I think it's totally worth it. Especially after we spent more than 20K fixing the place up for sale....

 

[yoopermom]

Thanks for the Foremost referral, I have an email out to them now for my friend.

Anyone else? It just seems so odd to me, because there are soooo many vacation homes/rentals/vacancies up here....

Terri

 

[LaNina72]

My situation started in '06, before the housing market crash really hit. I'm not sure how things might have changed due to that.

Hubby and I purchased a second home in NY and continued to live in CT. Our insurance co insured both CT-primary, NY-secondary. But we did have to have a separate insurance agent as our CT agent was not licensed in NY.

After a year we decided to move to NY and make that our primary home and CT would be our secondary. A quick call to the agents and all was set. (There was a difference in the total price for the insurance package, but I believe that was due to the car coverage also being switched to NY and not the house.)

We then decided to rent out the CT house and that is when things got complicated. Our regular insurance company did not offer what it calls "fire insurance" so we had to go with a different agency completely and I remember our bill tripled when it went from a secondary house to a rental.

Sooo.... my thought is that if you make it your secondary home... then maybe the insurance hit won't be so bad? But again this is before so many foreclosure happened. Hope this helps...

 

[Jennabeth]

Another Michigander with a soon-to-be vacant house. Our insurance co. also won't insure vacant properties, but is able to give me a quote through Foremost. We were quoted a little over $1200 a year, twice what we pay now. She also said that if we rent it out it would go down (a little), but we would need a signed lease and they will drive by and check. We still have a mortgage and are required to carry insurance. I was surprise it was higher, but she explained that vacant homes are targets for vandals (luckily we live close and have an alarm & cameras) and sometimes little problems become big problems just because no one is there to discover the little problem.

 

[talulabelle]

My friend had a similar situation - the insurance is crazy because vacant houses are a huge draw for vandalism, teenage pranks, squatters, unattended problems that aren't noticed (electircal problems for example) and turn to fires before anyone notices etc.

She knew of a woman who was going through a nasty divorce and was a victim of domestic violence and needed to get out of her house, but didn't have the money to rent anywhere. She let her live at her house rent free until they were able to sell it because it was a win - win for both parties. Their insurance was WAY lower and it helped the woman have time to find a job and get on her feet with her own apartment while trying to leave her husband.

( they had a signed lease, they just charged rent of $1 a month)