Is Your Home Vacant During a Renovation? Make Sure You’re Insured Properly!
It makes sense to move out of your home while renovations are underway. After all, who wants to live with daily chaos, noise, and privacy intrusions major renovations deliver?
But before you make a move out of your home, it’s a good idea to check with your insurance provider to see if you need to adjust your policy. You do not want to fall victim to “vacant home” exclusions that are often standard in homeowners insurance policies.
How Does a Vacant Home Impact the Insurance Needs of Homeowners?
Being home most of the time means that someone is looking after your home each day. That means you can seek assistance at the first sign of trouble when things like fires, trees fall on your roof, vandalism, theft, leaky plumbing fixtures, and other acts occur.
This also means you’ll have fewer repairs to make and a great chance to prevent a total loss of the home. However, if the house is consistently vacant, the risks are greater, and the damage could go unnoticed until much later. When more damage occurs, it costs insurance companies more money to repair your home.
Because the insurance company’s risk is greater for vacant or unoccupied homes, many homeowner’s insurance policies have specific exclusions related to empty houses and how long they can be vacant before additional protection is required.
What Qualifies as a Vacant Home?
Typically, insurance companies consider a home one that is vacant or unoccupied if you are absent from the home for 30 days or more. Absences of smaller amounts of time can often be dismissed as vacations or travel.
Some insurance companies allow up to 60 days before considering your home vacant. However, if you plan to be away from your home for 30 days or more, you should check with your insurance company to make sure you have the appropriate protection. It isn’t just your primary residence that may require vacant home insurance. Others to consider include:
- Rental properties
- A new purchase you’re not yet prepared to occupy
- Extended hospital or convalescent care that will keep you out of your home
- Rental homes in between tenants
- Vacation homes you visit infrequently
- Hunting cabins or lake properties
It isn’t only homes under renovation that may require vacant or unoccupied home protection.
Vacant Home Insurance
This is the first protection you’ll want to invest in while your home is vacant and under construction. This adds additional costs to your existing policy but also means that your belongings, as well as the structure of your home, are protected while you’re not living on site.
Also, consider purchasing additional insurance coverage for your policy and your “vacant home” policy to accommodate costlier fixtures, appliances, and luxury features you’re bringing into the home due to your renovations.
You’ll certainly want to work with your insurance agent after your renovation to determine if you need additional protection to account for the value of the upgrades to your home. Also, you’ll want to see if you’re due for any discounts due to improvements you’ve made, such as advanced security systems, upgraded wiring, new roof, etc.
Upgrade Your Liability Insurance
One of the first things you want to do is obtain copies of insurance certificates from all contractors and subcontractors working on your home. Each contractor and subcontractor should have the following types of contractors insurance at a minimum:
- Liability including products and completed operations
- Property Liability
- Workers Compensation Insurance
This doesn’t mean that you do not need additional protection.
Even if your contractor provides proof of insurance, it does not mean the insurance is sufficient to meet the needs of someone injured while working on your home or visiting your home while it is under construction.
You should work with your insurance agent to determine your comfort zone, so you can get the liability protection you need during the renovation process. In addition to increasing your general liability protection, you might also consider purchasing umbrella liability insurance for a little extra safety net.
Builder’s Risk Insurance
During the construction and renovation of your home, it is vulnerable to mischief, theft, vandalism, and other damage. Builder’s risk insurance helps you recover items that are damaged, destroyed, or stolen during the construction process.
This includes the following:
- Building materials
- Equipment and tools
- Appliances
- Materials in transit
- Materials in storage
Most people think of this as something only building contractors need. However, homeowners suffer losses from these events as well. The idea is to insulate you from the brunt of the financial damage when covered losses occur so that you can return to the construction process as quickly as possible in the aftermath.