Vacant Home Insurance for Resort Communities

Your author just returned from a resort community in Flordia, where there were over 200 homes on a remote island accessible only by boat. There was a tremendous amount of confusion regarding vacant home insurance and landlord tenant insurance on the island, and most homes were not permanently occupied. Here are the most common problems we discovered for these "second homes."

1. Not knowing vacant home insurance was needed for many of the homes that were empty more than 3 months a year.


2. At times, the homes were covered as second homes or vacation homes by the insurance company of the primary dwelling, but at times the homes were rented out thus violating the policy.


3. Some of the homes that did carry vacant lot insurance, were also rented out from time to time and most vacant home insurance policies do not also act as landlord policies.


4. Vacant home insurance was needed because the owner lived in a State (or country) where the insurance company carrying the primary homeowners insurance was not licensed in Florida and thus could not pick up the second home as an extension.


5. Having vacant homeowners insurance in place that did not provide the proper wind protection needed in Florida. Flood protection does not need to be provided in a vacant home insurance policy and can purchased through the federal government program.

Anyone that maintains a second home in Florida, or any other resort community outside of their home state should make sure they do their research to see what type of policy will be needed, and if the home will be rented for income, making sure the vacant home insurance policy will allow for renters when not empty.

Expatriates Don't See the Vacant Home Insurance Risk

After working with expatriates for over 15 years, we have released the results of what can be called an informal survey on vacant home insurance for expatriates living outside of the U.S. for 1 to 5 years. Here is what was found.

1. About 92% of expatriates believe they can remain with their existing homeowners insurance company while they are living overseas, even if the home is empty, and don't see the need for a vacant home insurance policy. (The facts: these 92% are exposed)


2. 60% believe, if they had a claim on a vacant home in the U.S. while they were on overseas work assignment, and there was an uncovered claim, their employer would pay for at least some of the claim. (The facts, this is a false assumption and employers can't pay personal claims).


3. About 60% do find out they need vacant home insurance at renewal time when they inform their homeowners insurance company they are abroad. (The facts: Most of these people realize they have been uncovered for many months and need a vacant homeowners insurance policy).


4. 80% believe if they, or a family member lives in the house for over a few weeks a year, or comes back to the U.S. from time to time, they don't have a problem with the existing insurance company (The facts: this is a false assumption)


5. 95% believe they can have a friend or "other relative" live in the house and they don't have to make changes to their homeowners insurance policy. (The facts: even if you have a cousin living in the house or house-sitting, you need to make a change to the existing insurance policy. A cousin is not in the nuclear family.


6. 98% of expatriates say their employer does not bring the vacant home insurance risk to their attention before the expat assignment.

Instant Vacant Home Insurance Quote Estimates

Vacant Home Insurance Now (.com) a website that is used to put those in need of vacant home insurance together with an agent and insurance company that specializes in providing vacant home insurance, announced today that they will be able to provide a quick quote estimate if visitors to the website will complete the new contact form.

The new contact form takes about 3 minutes to fill out, and asks a lot more questions, but if visitors complete the full contact form, they will be able to get a price estimate that should be accurate to within 5% to 10%. To get an exact quote depends on their State, the exact situation, and the results of a 12 to 15 minute phone interview where details on the vacant home are collected (including an assessment of the vacant home value) and put into a computer program.

However, getting a quote estimate that will be 90% or greater in accuracy on the vacant home, by just spending 3 minutes inputting information into an online form is probably unmatched in the industry. It will give people an idea of what is covered and how much it will cost because they will need to budget properly. Vacant building insurance is more expensive than regular homeowners insurance, there is just no way around it. People should be prepared to spend 3 times to 5 times as much on vacant home insurance as they did on "regular insurance" when they were living in the house.

Even providers in the market that offer very limited policies with limited coverage are still at least 3 times as expensive and the coverage these plans offer is extremely reduced. We suggest spending a bit more to secure full coverage. Anything less is self insuring your vacant home.

The estimates do not mean that underwriters will eventually approve and offer coverage. Of course, the home needs to qualify for insurance and that is why this is called an estimate and not a quote.

Hurricanes no problem to homeowners and vacant homeowners market in 2009 so far

So far in 2009, there have been no major hurricanes that have touched the U.S. mainland which is a relief for the homeowners insurance companies and the companies that provide vacant home insurance.

Last year, hurricanes were also light but the previous three years saw a tremendous amount of hurricane activity and homeowners and vacant homeowners insurance rates soared in Florida and the coastal regions of Georgia, Louisiana, and South Carolina. Many regions in Florida require three separate policies. One policy for wind damage which could come from a hurricane. One for flood damage from heavy rain or a hurricane. The third is a basic homeowners insurance policy which normally excludes flood and has a limited wind benefit in Florida.

If a home in a coastal region or in the State of Florida becomes empty or unoccupied for longer than 60 days it will need a special vacant homeowners insurance policy. There are not many insurance companies that provide vacant home insurance in Florida or in any of these coastal regions. If one seeks quotes, make sure you know what perils the plan covers for, and of course see if wind is a covered peril or an exclusion. If you are lucky enough to find an all-risk vacant homeowners insurance policy make sure wind is not listed as an exclusion because all-risk policies do not have a list of what is covered and only the exclusions need to be examined.

5 Part Video Series Vacant Home Insurance 101

Vacant Home Insurance Now, the premier website on the net providing information on the need for vacant homeowners insurance and vacant townhouse insurance, is providing a 5 part video series that can be found on U-Tube by searching "vacant home insurance."





This series covers the need for the insurance if a home becomes empty for just 60 days, and why the regular homeowners insurance companies do not provide the coverage. There is a section on the bad advice that is pervasive throughout the market, given by friends, family, real estate agents, and even insurance agents. Advice like, "if you sleep in the house for just one night a week, you can keep your regular homeowners policy and you don't need vacant home insurance." We dispel these sort of myths.






Finally, the series talks about key coverage features when shopping for empty home insurance, and points out there is a big difference in the offering of various companies on a State by State basis. In other words, there is little to no standardization in this market and buyers need to closely examine the quotes they are getting to assure themselves they will buy quality.

1. Understanding Vacant Home Insurance
2. Vacant Home Insurance vs. Homeowners Insurance
3. Getting The Wrong Vacant Home Insurance Advice
4. Vacant Home Insurance Coverage Features
5. Additional Vacant Home Insurance Coverage Features

Clients blindsided by the need for vacant home insurance!

We have been writing vacant homes for a long time. 90% of the clients that contact Vacant Home Insurance Now are completely blindsided by the fact that their homeowners insurer does not provide coverage for a home that they consider empty, vacant, or unoccupied. This is happening so much we felt we had to spread the word and write about it.

If the above is true, and we now have the credible sample size to prove that it's true, there are tens of thousands of homes out there that may have no coverage due to vacancy but the owner believes the house is fully covered. However, if there was a claim the insurance company would not provide coverage because the house is empty or not occupied.

What all of this means is, the top companies do not inform their clients that they need special homeowners insurance coverage if the house is not being lived in. Most clients find out "by accident" when they call in for another reason, like to report an address change and they are being kind enough to report to the insurance company that "they have moved."

All insurance companies today communicate with their clients in several of the following ways:

1. email


2. website


3. online or paper newsletter


4. mail (privacy statements and deliver of policy riders)

Wouldn't it be easy enough to note: "As a reminder to all our policyholders we would like to remind them that we do not cover vacant homes, and this situation needs to be reported to us immediately."

Why don't the top 10 largest home insurers inform their clients they don't cover vacant homes, and they will quickly be terminated if they find themselves in this situation. This will be the topic of our next post.

California Wildfires Shut Down Vacant Home Insurance Marketplace

Several Insurance Underwriters are no longer taking certain risks in California due to the ongoing wildfire situation, and this includes some insurance companies that offer commercial insurance and vacant home insurance.

Clients may not be aware that underwriters of vacant home insurance can issue directives to managing general agents to no longer take risks in certain States effectively shutting off the state until the risk situation passes.

The most common example where an entire State is essentially "turned off" for vacant homeowners insurance in Florida, when there is a depression brewing or named storm in the Atlantic or the Gulf that has better than a 50/50 chance of hitting the State. Because the destruction can be so massive they will essentially "turn of the State." This is what has happened recently with Southern California because of the wildfires.

Of course, all current and existing policyholders have good insurance and claim payment is not in jeopardy. It's those that need new insurance policies or even those coming up for renewal that potentially could have a problem. If you are a client in need of vacant homeowners insurance in the Southern California area today, you may find you will have to go without insurance until the crisis passes.