Is Your Vacant Home Covered by Insurance? A standard mortgage arrangement requires the homeowner to keep insurance current. Legally, unless there is insurance coverage, the homeowner is responsible for damages sustained during a robbery or vandalism in a vacant home until the mortgage company forecloses or a short sale is finished.
Standard Policy Coverage for Vacant Homes
Before a vacant home is vandalized, check your insurance coverage. The majority of homeowner insurance policies do not provide coverage for an empty home after 30 days, which is a little-known truth. This implies that even though you may have paid the premium for your insurance policy if you moved out more than a month ago, your home might no longer be insured. To be certain, review your policy’s tiny print.
Why Vacant Home Insurance Matters
According to Mark M. Bello, a lawyer in West Bloomfield, Michigan, even if there was insurance coverage but the policy lapsed or expired, the homeowner would still be responsible for fixing the damage themselves in the event of vandalism.
The short sale is in jeopardy if the damages are not fixed, according to Bello. “The bank does not benefit from the short sale, thus the bank could decide at any time that they wish to foreclose.”
Because it has less of an impact on individual credit reports, a short sale is far less stressful for the homeowner than a foreclosure. To prevent anything that could jeopardize the short sale, a homeowner should buy unoccupied home insurance if they will keep their home empty for any length of time.
Vacant Homes and the Bank
Frequently, in short-sale situations, the bank will send a representative from a preservation company to inspect the property to see if it is empty. These people will replace the locks and let the bank know that the house is empty, even if you’ve only recently moved down the street.
Types of Vandalism
In the middle of the night, thieves have been known to cut off a lockbox and carry it home to drill out the key. They can then come back in the daylight, bring a truck, enter through the front door, and load the truck with all the appliances.
However, harm can be done to a house without breaking in. For instance, since the electrical panel and air conditioner condenser are typically placed outside the house in the side or back yard, a burglar can easily steal them.
Kids have been known to throw rocks or start fires through windows made of plate glass just to see the glass shatter. In other cases, squatters enter and build a home. Typically, they rest on the floor, may be substance abusers, or don’t bother to throw empty beer bottles into the garbage can. Without vacancy insurance, these costs could all fall on you.
Tips for Obtaining Insurance
When homeowners short sell, it’s typically because they want to protect their credit score or keep a foreclosure off of their public record. You can attain this goal with the aid of vacancy insurance. Start by requesting price estimates from insurance agents for vacant home insurance coverage.
Premiums may be considerably greater than those for a typical insurance policy. Because vandalism is exceedingly expensive to repair, a policy that covers an empty property will cost more than coverage that insures its contents. However, many banks won’t pay to fix the damage, so you’ll have to pay for insurance. The benefit is that monthly insurance for vacant homes is available.
Ways to Discourage Vandalism
In addition to insurance, it’s critical to take precautions against vandalism when your home is unoccupied. People who illegally enter another person’s property frequently take the easiest route. They seek to enter the house that is the most straightforward to rob. Here are a few strategies to deter vandalism:
- Ask a friend or family member to visit the house every day and to pick up any newspapers or mail that may have fallen on the steps or yard.
- Put a sign rider that reads “By Appointment Only” or “Does Not Disturb Occupant” on top of the “For Sale” sign.
- Request the use of a neighbor’s driveway.
- Install motion-activated security lighting.
- Set up a lamp that is timed and connected to turn on and off at specified times during the day.
- Install video cameras inside and outside.
- Install a security alarm.
- Double-bolt locks the doors.
- Put wood covering on windows.
- Ask the police to drive by as frequently as possible.
- Hire a private security company to drive by.
- Pay a house sitter.
The Bottom Line
You are accountable for a property as long as it is titled to you. Don’t expect your bank or current insurance will pay for damages if you leave the house before it sells. Take the required actions to halt vandalism and safeguard one of your most valuable assets.
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