What is vacant home insurance?

When you leave on vacation for a week is your home unoccupied or vacant?

While dictionary definitions for these words are similar, the answer to that question matters when it comes to insurance.

If you plan to be away for more than a few days, most insurers require that someone checks your home to ensure everything is working properly. The length of time can vary but is commonly five days. Whether it’s a trusted friend or a neighbour with a key, your caretaker needs to be able to reach you if any problems arise – think a burst pipe that’s caused flooding.

However, in Canada if your home is empty and left unattended for a period longer than 30 days – often called the 30-day rule – it could be considered vacant. This rule applies whether you’re paying monthly insurance bills and applies if the insurance company isn’t notified within that 30-day period. If your insurer doesn’t know, they can void your home insurance policy and deny any claims.

Seasonal properties, such as a cottage, are not vacant because insurers consider them as recreational or secondary homes. That being said, it’s a good idea to check your policy and speak with your broker to make sure you don’t require a special endorsement for the time you are away.

What is an unoccupied home?

In insurance terms, an unoccupied home is one that is temporarily uninhabited. That means there’s furniture, most of its utilities and appliances are still functioning and the owner plans to return. It is habitable at any time.

What is a vacant home?

A vacant home has been emptied of furniture, appliances, and the utilities have been turned off. It has been left unattended for more than 30 days, possibly due to the property being on the market or rented.

Essentially, if you own a property that is vacant for a set period of time then you need vacant property insurance. The reason you need to let your insurer know the home will be vacant is because of the greater risk of damage when no one is living there.

As a homeowner, it’s a good idea to take the word ‘vacant’ seriously. A 2022 Ontario Superior Court case found an insurance policy exclusion for vacancy applies, even when an insured had arranged for people to look after his vacant property on a daily basis because he had no intention to inhabit the place again. The claimant argued the word vacant was vague, but the court found that the insured’s policy did not make an exception for him to have someone look after the unit while he was living out of province.

The ruling meant the claimant lost his $100,000 water damage claim against the insurer.

Reasons you many need vacant home insurance

People are absent for extended periods for various reasons. Some of the most common are:

• Selling a home you no longer live in because you've moved into a new property and it’s still on the market.
• Owning a rental property that is empty during the off-season.
• Extensive renovations or repairs that make your home uninhabitable.
• Owning a vacation home that you use part-time.
• Travelling for an extended period of time for work, military service or a trip.

Not all insurance providers offer coverage for vacant homes since there are more risks associated with them. They are more vulnerable to vandalism, theft and squatters. However, some insurers offer a special policy or vacancy permit to protect the property in your absence. It can be a separate policy or as an add-on endorsement to your existing homeowner’s policy.

What does vacant home insurance cover?

A vacant home insurance policy typically protects you from things basic perils such as:

• Fire
• Wind
• Explosions
• Lightning
• Hail

Other protections may be excluded, most commonly theft and vandalism. Liability is usually not a part of the policy although you might be able to add these coverages, depending on the insurer.

Ways to protect a vacant home

If you will be away for an extended period, there are things you can do to give it a more ‘lived-in’ look:

• Lock/seal all doors and windows
• Set lights on timers
• Cover windows with curtains or blinds
• Consider installing a home security system
• Remove valuables
• Have a trusted friend or family member check the house
• Arrange for the grass to be trimmed and snow shovelled in the winter
• Keep the backyard tidy and don’t let mail or garbage pile up
• Check on appliances periodically

As always, it’s a good idea to know your homeowner’s policy. If you have any questions about how long you can be away without someone checking on your home or how long it can be vacant, speak with your broker.

Related Reading: (SC link first, then IH)

Is your home safe while you're on vacation?

With files from Canadian Underwriter