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