How Occupancy Affects Home Insurance

Whether you are renovating your home, taking an extended trip abroad, or you are waiting for the next person to move into your rental home, there are various scenarios that could affect occupancy.

What many homeowners don’t realize is that occupancy can impact your insurance policy, so it’s essential that you have a clear understanding of what type of situations can affect your insurance and what to do in these circumstances.

Here are a few tips to consider should you find your home vacant or unoccupied.

Why Does Occupancy Matter?

Whenever you take out home owner’s insurance, you will find that your policy has very precise wording on what is covered and what isn’t. Occupancy is one of the main factors considered in your contract since it can have an impact on the probability of a claim.

For instance, a vacant property is more likely to experience fires, liability, and acts of vandalism. Even worse, an intruder could face an injury while breaking into the property and file a claim or even sue the homeowner. These increased risks are likely to affect your policy.

Why Your Property Might Be Empty

There are various reasons your home could suddenly become vacant or unoccupied, and it’s important to note that there is a distinction between these two terms and they each impact your policy in a different way.

An unoccupied home still contains the owner’s personal property and is immediately suitable for occupation, while a vacant home will be entirely vacant and may even have the utilities shut off.

The various scenarios that lead to an empty home will also have an impact on the type of coverage required.

Scenarios could include:

• Renovating your home: If you are undertaking extensive home renovations, then you may be required to move out of the property temporarily. Contact your provider to discuss coverage, particularly as construction sites could attract thieves and increase your liability risk.
• Travelling: If your residence is temporarily unoccupied while you take an extended trip, you may need to purchase an endorsement for additional coverage.
• Medical treatment: If the property is unoccupied for an extended period while you recover from a surgical procedure, illness, or accident, then speak to your agent to see what arrangements can be made.
• Renting or selling: Your property may be empty for some time while you prepare your home for new tenants or are busy screening the next potential tenants. During this time, you may require a separate policy or an endorsement, so speak to your provider to obtain the right coverage.

If you expect your home to be unoccupied for an extended period of time, then you should contact your insurance agent to find out whether an endorsement is required, or a new policy needs to be put in place.