Vacant Home Insurance or Builders Risk Insurance? What to buy

There seems to be a lot of confusion from customers about when they need to purchase a vacant homeowners insurance policy vs. when they need to buy a builders risk insurance policy or contractors policy.

Most insurance companies that insure vacant or unoccupied homes have what we call "residential" products. If the work on the home during the period of vacancy is going to be minor or cosmetic such as putting in new hardwood, painting, or redoing a few bathrooms, then most vacant home insurance polices will apply.

However, if the work or renovations that are going to be done during the vacancy time are going to be extensive, a builders risk or contractors policy will almost always be needed. What is the basic definition of extensive renovations:

1. Where any work is being done on the roof


2. Window replacement throughout the house


3. Extensive plumbing or electrical work


4. Removal of load bearing walls


5. Other major renovations

You do not want to be holding a residential vacant home insurance policy, have a large claim, and have the adjuster tell you they are denying your $50,000 claim because you had taken out the wrong policy or misrepresented the situation to the insurance company!