Vacant Property Insurance Ontario

Vacant Property Insurance Ontario

If you're a homeowner, you likely already have homeowners insurance. If you have a mortgage, then your lender would have required you to purchase homeowners insurance before approving your mortgage. Even if you own your home outright, then it's wise to have homeowners insurance.

However, if you own a building that you live in occasionally or lease, and it's empty for a prolonged period of time, your traditional homeowners insurance policy likely will not continue to protect the building. Depending on your insurer and the stipulations in your policy, it's possible that a vacant building will not be insured—depending on how long the property has been vacant for. That's where vacant property insurance comes in.

What is Vacant Property Insurance?

Essentially, if you own a property that is vacant for a set period of time—usually around 30 days—then you need vacant property insurance. This type of coverage provides protection for when your property is vacant for an extended period of time. Usually, most homeowners insurance policies do not extend to empty buildings. A homeowners insurance policy is meant to protect a home that's being lived in. Someone is there to cut the grass and shovel snow, pick-up the mail and maintain the building. Meanwhile, there are many more risks associated with owning a vacant property because no one is usually around to check on the home and complete routine maintenance for an extended period of time.

While the amount of time that a building remains empty until it's considered vacant depends on the insurance company, if you own an empty building or know that your property will be vacant soon, you need to let your insurance agent know right away. Otherwise, you risk not having any insurance coverage. If there is an accident, then you would be personally liable for any financial damages incurred.

Who Needs an Ontario Vacant Home Insurance Policy?

Usually, vacant property insurance in Ontario is only needed during specific situations in which a home or rental property will be empty for an extended period of time. If you're a property owner and you lease rental properties, and you know the building will be empty you need to let your insurance provider know immediately.

Common Situations Requiring Vacant Property Insurance:

There are a number of reasons why you may need vacant home insurance. Some of these reasons may include:

• Selling a home you no longer live in because you've moved into a new property. If the sale takes longer than anticipated, then the home will be considered vacant.
• Owning a rental property that is empty during the off-season. For example, if you lease a cabin during the summer but do not rent it out during the heating season, then it's considered vacant during the colder months.
• Performing extensive renovations or repairs. If your property is temporarily uninhabitable, then it will be considered vacant for the duration of time in which you are not living in the home.
• Owning a vacation home that you use part-time. If you have a second property that you only stay in for a few weeks or months of the year, then it may be considered vacant during the time when it is unoccupied.
• Traveling for an extended period of time. If you travel for work, are planning on taking a big trip, or are on active military service, and your home is empty for a long period of time, then you may need vacant property insurance.

How Long Can I Leave My House Unoccupied?

Most vacant home policies are required if your house is empty for 30 days or more. This is often referred to as the 30-day rule. It means that if our property is unoccupied for more than 30 days, your insurer can void your home insurance policy and deny any claims. To avoid being stuck in this situation, it's important to let your insurer know about your absence before that 30-day period begins.

For example, if you're not staying at your vacation property during the winter, let your insurance company know. Then, the insurance agent will be able to let you know what your options are. For instance, some insurers may consider the property vacant. Others might consider it unoccupied.

What's the Difference Between an Unoccupied and a Vacant Home?

In the insurance world, "unoccupied" and "vacant" refer to two different situations. However, it's important to know that different home insurance companies will have different guidelines regarding when a home is considered vacant, and when it is considered unoccupied. A licensed broker at Morison Insurance can help you find an insurer who is suitable for your unique needs.

Typically, an unoccupied home is a property that can be lived in at any time, and is one that you intend to occupy in the near future. Some vacation properties, like cottages, fall under this category. The cottage will be considered unoccupied during the off-season. A typical cottage insurance policy already takes these unoccupied periods into account. It's important to check with your insurer to confirm that your policy enables unoccupied homes to be empty for more than 30 days. You should also ask someone to check on your unoccupied properties while you're away—perhaps a neighbour or friend who stays at their cabin year-round.

Contrarily, a vacant property is a home that you don't intend to live in for a set period of time. For instance, the utilities are not being paid for, it doesn't have any furniture within the space and is all-around considered unlivable. Often, investment properties that are waiting to be rented or sold fall under this category.

What Are Vacancy Permits?

It's important to note that not all insurance providers offer coverage for vacant homes, since there are more risks associated with owning vacant houses. That said, sometimes insurers will offer a special insurance policy or vacancy permit to protect the property in your absence. Whether or not your insurer offers this dispensation often depends on the reason why the property is empty.

What is Covered with Vacant Property Insurance?

Vacant home insurance coverage varies per provider, so it's best to ask your Morison Insurance agent to go over the specifications of your policy with you. However, vacant house insurance may include some of the following types of coverage:

• Vandalism coverage: If your property is vandalized in your absence, then this type of coverage will help provide financial remuneration for any repairs or replacements you need to make due to glass breakage, graffiti and other types of intentional destruction completed by a third-party.
• Explosion and fire coverage: A fire breaking out at your vacant property is a big insurance risk, and would be absolutely devastating if you're not insured. With a vacant property insurance policy, you can rest assured that you'll have financial coverage to repair or replace the damaged building in a fire or explosion.
• Hail, lightning or windstorm damage: Extreme weather events can wreak serious havoc on your vacant home. Usually, a vacant property insurance policy will cover property damage from certain weather events up to the coverage limits.
• Malicious mischief coverage: This type of coverage may or may not be included under vandalism. But if a third-party decides to deface part of your property or steal your garden gnomes, you may be covered with malicious mischief coverage.
• Protection from squatters: One of the biggest risks that vacant properties face is that squatters will take up shop without the property owners knowledge. This can lead to damage, theft and more. Protect your property from illegal squatters with the right vacant property insurance policy.

Additional Coverage for Vacant Properties

Also, there will be additional coverages that you can usually purchase as an add-on endorsement to vacant home insurance plans. A couple of these add-ons may include:

• Sewer back-up protection: Often, flooding sewers are not covered under a standard vacant property insurance policy. However, backed-up sewage can cause devastating damage to empty homes, especially if no one is there to check on the property frequently. However, usually this coverage can be added on to your vacant property insurance policy.
• Water damage protection: Similarly to backed-up sewer protection, many types of water damage—such as overland water damage—are not covered by a standard vacant property insurance policy. It's also important to note that some types of water damage, say from a frozen pipe that burst over the winter, may not be covered because it's assumed that amenities should be turned off or that regular maintenance upkeeps the property's pipes.
• Earthquake protection: If your property is in an earthquake zone, then you should inquire about adding this protection on to your vacant property insurance policy. While not all insurers offer it, it's always worthwhile to ask.
• Sprinkler leakage: Does your property have built-in sprinklers? Should these sprinklers leak then they could cause serious damage to your home while you're away. Protect yourself from this risk by adding this coverage onto your vacant property insurance policy.

How to Purchase Vacant Property Insurance in Ontario?

Ontario Vacant property insurance can be purchased two ways: either as its separate policy or as an add-on endorsement to your existing homeowners policy. Before purchasing vacant home coverage, you should establish whether you need a separate policy or if an endorsement is sufficient. For instance, an endorsement may be useful to cover your property for temporary vacancies—such as a rental home that is soon to be unoccupied because a tenant gave his or her notice. If you think it may take a while to find a new tenant, then an endorsement should be able to cover you while the property is empty. Meanwhile, if you know the property will be empty for a significant amount of time—say you're going traveling for a year—then a standalone policy might be a better fit.

The next step is to speak to a Morison Insurance broker. One of our dedicated brokers will be able to help you find a policy that is suited for your unique needs. He or she will shop around on your behalf to find a competitive rate that offers comprehensive coverage.

What Does Vacant Property Insurance Cost?

The average cost of vacant property insurance varies depending on the insurance provider. Additionally, there are a number of different factors that also influence how much your unique vacant property insurance policy will cost. Some of these factors include:

• Property type
• Amenities on the property, such as pools, ponds and trampolines
• Property size
• If the property borders a neighbour
• Vacancy reason
• The amount of coverage
• Coverage limits
• Coverage terms
• Premiums and deductibles
• Unoccupied vs. vacant
• Whether amenities are hooked up, like hydro and heating

What Questions Will My Broker Ask?

When applying for vacant property insurance, there will be a number of questions you have to answer. Some of these questions may include:

• Is there a fire hydrant within 300 metres?
• Is there a firehall within eight kilometres?
• Is it a voluntary firehall?
• Will utilities be maintained?
• Is there a sump pump?
• Is there a pool and/or hot tub on the premises?
• Are there more than six parking spots on the premises? If yes, then how many?
• Is the lot bigger than one acre? If yes, then how many acres?
• Is the risk located in an active flood zone?
• Is the risk located within 50 kilometres of an active fire zone?
• Does the building have a heritage designation? Is this limited to the building’s facade?

How Can I Mitigate Vacant Property Risks?

While vacant property insurance is essential to provide financial remuneration in the event of an accident or natural disaster, it's also important to do what you can to mitigate the risk of something happening at your empty property. Ensure you are investing in routine maintenance while the building is empty. Even having someone check on the property from time to time goes a long way to deter squatters and vandals. Consider installing a security system and ensure the property is locked at all times. You should also be mindful of the amenities, such as heating and plumbing. Consider turning amenities off while no one is at the property. And of course, let your insurance broker know when you think the property will be vacant, so you can get a jump on your vacant property insurance policy.

How Can I Get a Vacant Property Insurance Quote?

If you're interested in acquiring a vacant home insurance policy, then reach out to our friendly and qualified brokers today. Any member of our highly skilled team will be able to help you find vacant home insurance coverage that is ideal for your needs. To get started, fill out the online form below or give us a call at 1-800-463-8074.