Housing Market Stalls Causing More Vacant Homes

The housing market in the Spring of 2010 made a "dead cat bounce" and homes not selling and sitting empty this summer means the need for vacant home insurance. Most people are overly optimistic regarding how quickly their home will sell. Everyone thinks their home is special and will out-compete the competition. Many of these people will move into a new house while the old one sits on the market. In 2010 this is extremely dangerous.

After the home sits empty for just 60 to 90 days homeowners may need to purchase vacant home insurance. Their existing homeowners insurance company will not offer a vacant homeowners insurance policy so they will have to switch carriers. Their existing homeowners insurance company will not continue to cover the empty home while the family moves into a new home as you cannot have two "primary residences." Vacant home insurance is also expensive, and will cost about 3 x to 4 x the previous cost of homeowners insurance.

Vacant Home Insurance Now (.com) has noticed many people having to continually re-up and renew their vacant home insurance and vacant dwelling insurance program because, to but it simply, homes are not selling well in the summer of 2010. The market is not an F, but no better than a C-.

Vacant Homeowners Insurance Quotes: 3 Problems

When people have a home on the market for sale that becomes vacant or empty, and requires vacant home insurance, they soon find they are being cancelled by their existing homeowners insurance company. When they seek quotes on the market for vacant homeowners insurance there are three potential problems and pitfall that they need to be keenly aware of to avoid major problems down the road.

The first is, what is the name of the insurance company providing the vacant home insurance quote? It's amazing, but people get vacant homeowners insurance quotes and the agent may not even present the insurance company that is backing the quote! Our rule, if you don't recognize the company or cannot find the insurer easily or the Internet, it may not be the strongest quote so look elsewhere.

The second item is, what are you insured for? People get vacant house insurance quotes and they assume they are getting the same level of coverage as when the house was occupied. Instead of all risk coverage for the empty house, they end up with named perils coverage and only 8 perils covered for! Again, this is not readily apparent when one ask for the quote in many circumstances. Always ask what you are insured for and get the list of named perils. (for example, fire, smoke, lightning, wind, etc).

The last pitfall is the perils of vandalism. Vandalism if the # 1 cause for claims in a house that is vacant or unoccupied. All vacant dwelling insurance quotes should come with vandalism. Unfortunately, many do not unless the applicant asks specifically for this coverage and the coverage is added back in for an additional fee.

All-risk coverage from a quality company, and one that includes vandalism is available from vacanthomeinsurancenow.com

This was taken from an email sent to one of our employees;

We want everyone out there to know that property management services are not a substitute for the proper insurance coverage or a vacant homeowners insurance policy. When our employer moved us to The Woodlands Texas last Spring, we had a very hard time selling our home in Boca Raton, FL.

The company offered to buy the home for about $40,000 less than what we thought we could get, so we chose to retain the risk ourselves, and take the additional time to sell the property. The company provided Property Management Services through Prudential Relocation, their moving and relocation company. From what everyone told us, property management services is all we would need and these included a landscaping company company coming by the property every Tuesday to cut the lawn, clean up leaves, etc.

We never even thought about insurance. On day 108 of the house being empty we had a very violent tropical storm blew threw (we had been living in Texas) and a small section of the roof was blown off. Rain soaked much of the 3rd bedroom.

The problem was, no one here knew about it. The rain was not taken care of and quickly turned into a $60,000 mold and mildew claim. To make a long story short, the insurance company was willing to pay $10,000 but would not pay the balance of the claim because the house was unoccupied. Let me tell you, property management services on your home for sale does not mean you do not need a vacant home insurance policy.

Don't let your kid's neighbor housesit without the proper insurance

Two years ago, my husband's job took him on a temporary assignment of 5 months to Prague to finish up a large computer project for the Czech government. Of course it was the opportunity of a lifetime to go with him and I figured a way to take leave from my job (...no loss if they fired me anyway) to join him in this amazing city, which was untouched by the destruction left behind in WWII.

Siteseeing aside, we asked the 20 year old son of a neighbor to "housesit" while we were away. What's the worst that can happen, spilled beer? We felt better withsome living in the house and we could avoid that expensive vacant home insurance, or so we thought. Because we had someone to stay in the house we had no idea we would not rely on our current homeowners insurance policy which was paid up until the end of the year.

While we were away (in the 4th month) a large tulip poplar tree fell on the house during a windstorm. Jason acted quickly to get the hole repaired using the credit card we had left him, but I had to fly home to see to the contractor arrangments etc. The claim we submitted to the insurance company for over $40,000 was totally denied because they told us we did not have the right insurance on the house. We had needed to write a special policy why we were away called a landlord tenant policy (also called a tenant boarder policy).

As you can guess, we had no idea we needed to do this and didn't even think to call our agent. It was a total disater and all the extra money my husband made by taking the overseas assignment quickly was eaten up in this massive repair.

Bait & Switch Vacant Home Insurance

When we leave our home in Radnor Pennsylvania for the winter to spend 4 or 5 months in Scottsdale Arizona, we typically can find someone to "sit" in the house while we are away. Last winter we found no one, and spoke to our agent about how to insure the home.

We were advised that we were in luck, and our regular homeowners insurance company would be able to insure our vacant home at an additional premium. In February of that year, we had a major claim when vandals broke into the house, stole some items, but even worth left about $20,000 of damage in the house.

When we filed the claim with our insurance we were in for a big shock. We had assumed the coverage was pretty much the same because it was the same insurance company. We quickly learned we had no coverage for this incident because the new policy was a reduced level of coverage. Our agent told us "you just can't get the same level of coverage when a home is not being occupied" and this is what people live with. Basically.. we had no other choice?

However, no one explained the coverage was to such a lesser degree. Our advise, when you put on a vacant dwelling insurance policy make sure you know exactly what you are buying.