Vacant Condo Insurance Rules

Vacant Home Insurance Now is still able to provide coverage to vacant condos, but it requires a special application and there are a few new rules.  First, the vacant condominium must be covered for one full year.  Six months of coverage on vacant condos is no longer available.

Also, the value of insurance coverage must be $100,000 or more, in terms of replacement cost.  Finally, the premium must be paid in advance for the year.  If one full year of coverage is not needed, the insurance company will issue a pro rata refund after the cancelation.

We are often asked how to value a condominium for insurance purposes.  Most owners of unoccupied condos are only responsible for "studs in" for insurance purposes.  So, for a fire for example, the condo association would be responsible for rebuilding the walls and roof and the insured, just about everything else.

How to Value a Condo for Vacant Condo Insurance

When one seeks quotes in the market for vacant home insurance, one of the most important things is getting the value of insurance right. The value a vacant home needs to be insured for is not the sale price, but rather the rebuild or reconstruction cost assuming there is a total loss.

This can be very difficult when valuing a condominium. A "condo" is a condo by definition because the homeowners or condo association owns at least part of the dwelling. For example, it's common for the homeowner to own from "the studs inward" meaning the condo association owns the walls, roof, support beams, trees, shrubs, etc.

When the owner of a condo finds himself needing vacant condo insurance, the best formula to estimate the value of what the condominium needs to be insured for would be the following:

Cost of the flooring, electrical, plumping, kitchen cabinets, kitchen counter, bathrooms, lighting "fixtures," appliances, and drywall (with all labor costs) = insured value.

For most condos that sell for $150,000 the rebuild or reconstruction cost will be at least $60,000 and may be much higher, however the number should be well below the rebuild cost of a single family home.