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How to insure a vacant home

By Jay MacDonald ·
Wednesday, August 25, 2010
Posted: 3 pm ET

As the housing market continues on life support, some homeowners with hard-to-sell properties choose to move on, whether to pursue a new job, downsize or simply relocate. But it's very risky financially to leave your home vacant unless you adjust your homeowners insurance accordingly.

Your home insurance rates are usually based on you occupying your home, and for good reason. Without you at home to call 911, deter burglars and vandals or stop a minor leak or electrical short from becoming major, your home insurance company would assume additional risk.

That's why most home insurance policies contain a vacancy clause that automatically changes or excludes coverage should the home become vacant (residents and belongings gone) or unoccupied (residents gone, belongings remain) for a specified period, often 60 days.

"Some insurers may not pay claims if a home is vacant for 60 days or more. Some policies might automatically shift to a different amount of coverage (e.g., liability insurance only) after a specific number of days unoccupied," according to the National Association of Insurance Commissioners.

If you need to leave your home vacant or unoccupied for an extended period, the best course of action is to contact your home insurance agent and explain the situation. Many insurance companies offer an endorsement to your policy that will cover a vacant dwelling for an extended period. You also may obtain vacancy coverage for specified periods up to a year.

No surprise, it's going to cost more than your current homeowners insurance rates. But it's a small price to pay compared to the major expenses you'd face if something happened to your house while you were away.

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