A Vacancy Permit is an endorsement added to a homeowner policy that extends your home insurance to maintain coverage and insure the property while it is vacant. A vacancy endorsement usually is issued for a specific length of time and reduces coverage to your insurance. A vacancy endorsement is useful to ensure that your home remains insured during the period of vacancy. Without a vacancy endorsement, a vacant home may be uninsured due to the exclusions on a homeowner policy and claims may be denied.
How Does a Vacancy Endorsement Change My Home Insurance Coverage?
Vacancy endorsements will usually restrict coverage to the basics, like fire and eliminate important coverages like water damage among others. If you do not have a vacancy endorsement and your home is vacant, then your home may become completely uninsured and any claim happening during the time of vacancy may be denied.
How Much Does a Vacancy Endorsement Cost?
A vacant home could cost twice as much if not more than a regular homeowner policy. The vacancy endorsement is a temporary solution and will include a change in premium for the term of the permit. Some insurance companies have options that do not cost as much, but it depends on your insurance company. If you see really high rates, you might want to shop around, especially if this is something that may not be resolved quickly. The long-term goal should be to get the home occupied or sold as soon as possible to save money and eliminate your risks.
Why is a Vacant Home a Problem for Home Insurance?
The incidents of claims and potential things that could go wrong with a vacant home as far greater than those in a situation where someone is living in a home full time. When a home is vacant, there is a greater risk of theft, vandalism, fire and all kinds of damage. When no one is present to see what is happening in a home or to notice when things go wrong, it makes sense that the risk is higher for a claim or damage to happen.
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Disclaimer: Coverage will vary on state, insurance company, and type of policy.