Do you flip homes for a profit? If so, you know how fickle the real estate market can be. As much as any investor would like to be able to buy and sell their properties in under a month, the reality is that many houses take much longer to flip. According to RealEstate.com, nearly all real estate investors will own and manage an empty home from time to time, making vacant home insurance an essential part of protecting their investment. If you buy and sell homes for profit, click here to read more about the importance of unoccupied or vacant home insurance and whether it could be right for you.
Why Homeowners Insurance is not Enough
First, it is important to recognize that insurance companies view occupied homes very differently than properties without someone living in them. When no one lives in a home, there is no one available to stop water from flowing out of a burst pipe, extinguish a small fire, or cover a broken window. Hence, the damages from storms or extreme temperatures could lead to greater losses, such as pest infestations or mold, which would not have occurred if someone were present on the property.
In addition, an investment home is often a magnet for thieves and vandals. It is easier for criminals to pinpoint an empty home when it is undergoing visible renovations or is placed on the housing market for a long period of time. Furthermore, burglars may search for empty houses in areas and neighborhoods known for investment properties. Even if there are no furnishings in the house, many of a home’s components, such as copper plumbing and major kitchen appliances, have value to a would-be thief.
For these reasons, a homeowners insurance company will typically stop short of providing coverage to a house that is unoccupied or vacant for a period of 30 days or more. Most policies include clauses that either excludes, reduces or drops coverage for unoccupied or vacant houses that meet these restrictions. Should you attempt to file a claim against a homeowners policy, the claim would probably be denied.
Finding Property Insurance for an Unoccupied or Vacant Home
Whether you are renovating a house to flip it or waiting on a finished home to sell, it is important to find the right insurance coverage to protect your investment. Look for vacant home insurance coverage that will cover the home’s physical structure, as well as any liability losses sustained by visitors or intruders on the property.
It is important to talk with a trusted insurance agent before purchasing vacant home insurance for your investment property. At our agency, we are happy to explain the difference between unoccupied and vacant home insurance, and we can provide you with helpful tips for reducing your claims risks and potentially lowering your premium.
Contact us to speak with one of our team members and review your vacant home insurance policy options. We understand the unique coverage needs of investors and will assist you every step of the way. Call us today. We look forward to serving you soon.