Nobody’s Home: Protection Using a Vacancy Clause

There are times when the phrase “The lights are on, but nobody’s home” can actually be pretty smart advice.  Vacant buildings are more prone to arson, theft of copper plumbing, vandals and water damage.  Vacant property, often an attractive nuisance, represents a liability.

The insurance coverage pertaining to vacant buildings needs to be understood and carefully managed.  In a typical homeowners policy, the vacancy exclusion applies after a home has been empty for 30 to 60 days, after which coverage begins to diminish.  For example, after 30 days vandalism may be removed, after 60 days fire damage is removed, and so on.

If the property is a home, it is considered “unoccupied” if the furnishings are there although the resident is elsewhere. A home is only considered “vacant” when the resident has moved out and removed the belongings.  Coverage differs depending on which designation applies.

A commercial building is seen as “vacant” unless at least 31% of its total square feet is occupied and operations conducted there must be those customary to the use of the building.  Standard commercial property policies state that if a building is vacant more than 60 days, no coverage will be provided for vandalism, sprinkler leakage, water damage, theft, or attempted theft.

Homes or commercial buildings should not appear to be vacant, if possible.  Owners should maintain the premises by making regular checks, mowing the lawn, picking up mail, putting lights on time switches, and leaving some furniture inside.

Homeowners and commercial insurance policies are not designed to protect vacant buildings indefinitely.  Special policies are available, with limited coverage such as covering fire and wind damage but not theft, vandalism or water damage.

The professionals at The Reschini Group understand the various options and conditions related to vacancy clauses for home and commercial properties.  Contact us to help determine the best approach to secure the right coverage for your specific situation.

Copyright 2019 The Reschini Group

The Reschini Group provides these updates for information only, and does not provide legal advice. To make decisions regarding insurance matters, please consult directly with a licensed insurance professional or firm.