Vacant Building Insurance Policy – Why You Need It

Are you looking to purchase a residential or commercial property to knock down and redevelop eventually?  If so, vacant building insurance might be the best solution in the short term.  Depending on the occupancy at the time of loss, your property insurance might not pay for an incident that occurs when the structure is vacant without carrier knowledge. Learn more about how to protect yourself if you own a vacant building.

Vacancy Provisions in Insurance Policies 

The terms of vacant property insurance differ depending on the provider. In some cases, buildings are considered vacant when they’ve been unoccupied for a mere 30 days. With other insurers, a building is regarded as vacant if empty for 60 consecutive days or more. Should the occupancy of your building change, you may need to amend the policy to your current coverage to protect yourself against damages. Find out what the terms for your specific insurance policy are. Ask about the insurance company’s definition of “vacant” and “unoccupied.” Some policies have exclusions for a vacant property, but not an unoccupied one.

That means that you might want to look into additional insurance if you go on an extended vacation or commercial property becomes vacant. Terms and definitions are also different for homes and commercial properties. You should always notify your insurance agent when factors that influence your insurance policy change. We can help you amend your policy or add on to it so that you don’t have to pay out of pocket if a catastrophe happens while the structure is vacant.

Why Should You Cover a Vacant Property?

Although a vacant property may not have customers or residents, it’s at risk of vandalism, fire and other perils. If no one is monitoring a property or structure, it is at a higher risk of specific threats.  If another emergency, such as a fire or flood, occurs, the response time may be slower for a vacant structure. The fact that it’s vacant means that it can take longer for someone to notice that there has been an incident. The longer it takes to remedy a situation that could result in an insurance claim, the more likely the property is to sustain damage. Because vacant properties carry an added insurance risk, traditional insurance policies don’t usually cover them automatically.

Who Needs Vacant Property Insurance?

There are several circumstances in which you might want vacant building insurance coverage. Some of the most common are as follows:

  • flipping an investment property.
  • commercial property is being repurposed to another use.
  • closed on a new home but won’t move in for several weeks.
  • moved into a new home, and your old one is vacant while it’s on the market.
  • travel for weeks or months at a time.
  • vacation home sits empty during certain seasons.
  • You must move out of your building temporarily while renovations take place.

If you’re a contractor or builder, you might wonder whether you need vacant property insurance. In that case, you might require a different type of coverage, such as a builder’s risk policy and an owner’s interest policy. Ask your insurance agent about the appropriate insurance protection for your situation.

Cost Savings for Vacant Building Insurance 

You can try to obtain a premium by:

  • Asking someone to check on the property regularly
  • Installing security cameras and a central station alarm systems
  • Increasing the deductible
  • Amending coverage limits
  • Showing that you have had few or no losses in recent years

If you have any questions, contact me here to secure your vacant property insurance program.


Opinions expressed in this article are solely the author’s opinion. They are not intended to provide the reader with legal or any other professional advice. Should you need information or opinion, consult with a qualified professional to address your specific needs.