In this tough economic time and with foreclosures on personal residences and businesses at a record high more and more properties are now vacant. Vacant buildings are more prone to arson, theft of copper plumbing, vandals and water damage. On the liability side, vacant property is often an attractive nuisance.
All policies contain a vacancy provision. In a homeowners policy the vacancy exclusion typically applies after a home has been empty for 30 to 60 days. At this point, the policy starts taking away coverage. After 30 days vandalism is removed. After 60 days fire damage is removed. Freezing of a plumbing, heating or air conditioning system will be removed unless the structure has sufficient heat and/or the water system has been shut off and drained.
If the property is a home, there is distinction between vacant and unoccupied. In an unoccupied home the furnishings are there although the resident is elsewhere. A home is only considered vacant when the resident has moved out and taken their belongings with them.
If the property is a commercial building, vacancy is defined in terms of the entire building. A building is vacant unless at least 31% of its total square feet are occupied and the operations conducted must be those customary to the use of the building. Under a standard commercial property policy if a building is vacant more than 60 days no coverage will be provided for vandalism, sprinkler leakage, water damage, theft, or attempted theft. Payment for other type of losses will be reduced by 15%. In Massachusetts most policies have a 30 day vacancy clause.
If your home or building is vacant there are some steps you can take to protect your property. It should not look like it is vacant. Care should be taken to maintain the premises by making regular checks to the premises, mowing the lawn, picking up the mail and leaving on the lights. If this is a dwelling it might be advisable to leave some furniture in the dwelling so that it does not meet the definition of a vacant home.
A homeowner’s policy or a commercial insurance policy is not designed to protect a vacant building. These properties require a special policy. These policies are typically more expensive and have limited coverage. They will cover fire and wind damage but not theft, vandalism or water damage. It is important to discuss your options with your insurance agent so that you can protect one of you most valuable assets.