The National Association of Insurance Commissioners (NAIC) is warning the owners of vacant properties that their standard homeowners insurance policies may not protect them against the degree of loss and liability that may arise with an unoccupied property.
As the real estate market continues to recover from the recession, many hard-to-sell properties remain empty after the owners have moved to take new jobs or have attempted to downsize. In the interest of cost cutting, many of these owners are tempted to cut the degree of insurance coverage on the property when, in fact, they may need to increase their level of protection.
Jane L. Cline, president of the NAIC and commissioner of insurance in West Virginia, said, “In many cases, people who have been trying to sell their homes for awhile have moved forward with their plans regardless, leaving a vacant home on the market. Having an unoccupied home can create several insurance implications that typically are not covered under a standard homeowners policy.”
Vacant and unoccupied homes are a greater draw for break-ins especially if the yard is untended, the mailbox full, or if the area is dark at night. Because no one is home, emergency response will be slower or non-existent, meaning a fire that might be controlled under more normal circumstances could be catastrophic.
Additionally, if no one is present to control access to the property or to supervise any activity that goes on there, the degree of liability in the event of an accident is greatly elevated. Most standard homeowners policies will not adequately address these conditions. The NAIC counsels homeowners to meet with their insurance agent and to review the terms of their policies as well as to contemplate taking out additional coverage rather than simply assuming the standard homeowners policy will be sufficient.