Vacant Home Insurance: What Canadians Need to Know
What is vacant home insurance?
Vacant home insurance refers to insurance coverage for a vacant property. Homes that may require vacant home insurance might include rental properties, homes under renovation, inherited property, or a home you’ve moved out of without selling.
While these words might seem similar, they have specific meanings in the insurance industry:
- Unoccupied = Temporarily empty but still furnished; owner plans to return (e.g., vacation home)
- Vacant = Empty of both furnishings and people for at least 30 days; owner does not plan to return soon
An unoccupied home is not necessarily a vacant home. If you’re not sure whether your property is considered unoccupied or vacant, contact your insurance broker for guidance.
A standard home insurance policy generally won’t cover a vacant home because these homes are subject to higher risks. A regular home insurance policy assumes that the owner is living on the property, conducting regular maintenance, and taking proper safeguards against theft and vandalism.
When do you need vacant home insurance?
You may need vacant home insurance if you are the legal owner of any home that is currently unoccupied and unfurnished, and which you do not intend to occupy in the next 30 days. This might include:
- A house you moved out of but have not yet sold
- A house you inherited
- A house undergoing major renovations
- A vacation house you routinely leave empty for long periods of time
- A rental or investment property with no current tenants
- A house that’s unlivable
What happens if you leave a home vacant without telling your insurer?
If you leave your insured home vacant without informing your insurance company, you run the risk of voiding your insurance policy entirely.
At a minimum, you will likely be unable to submit a claim for:
- Water damage
- Theft
- Vandalism
But even if your vacant home is damaged by something regularly covered by vacant home insurance, you could still have your policy dropped if you vacated the property without informing your insurer.
Your home insurance policy should specify the time frame in which you must notify your insurer that your home is vacant. In most cases, you are required to notify your insurance provider if your home will be vacant for more than 30 days.
What does vacant home insurance cover?
When you acquire a vacant home or notify your insurance company that your home is newly vacant, you may need to purchase a specialized policy, sometimes known as a vacancy permit, for vacant home insurance. These policies may cost more than standard home insurance and typically only cover a basic list of perils, including:
- Fire
- Lightning
- Hail and windstorm
- Falling objects
- Damage caused by squatters
Not all insurance companies in Ontario offer vacant home insurance, and the exact perils covered may vary between providers.
What is usually not covered?
In addition to perils not usually covered by standard home insurance (like flood and sewer backup), vacant home insurance usually won’t cover:
- Water damage: This type of damage can be significantly more severe in vacant homes, since no one is present to discover, report, and mitigate the damage from burst pipes, broken appliances, or other common indoor water sources.
- Theft: A vacant house is more likely to be targeted for theft than an occupied home and may not have a functioning alarm system.
Vandalism: Glass breakage and other damage associated with vandalism is too great a risk for a vacant property.
If you’re comparing coverage options for a vacant home insurance policy, take the time to read the fine print and understand all possible exclusions that apply to your coverage.
How much does vacant home insurance cost?
Home insurance quotes for vacant property vary significantly, and not every insurer offers vacant property insurance.
Due to the increased risks associated with vacant homes, vacant home insurance premiums might be 50% higher than those for standard homeowners insurance—or more. Insurance companies will evaluate your pricing based on factors like:
- The location of the home: Insurers use location to estimate the relative risk of a covered claim for fire, wind, or hail as well as to estimate potential response times. A vacant home in a rural area, for instance, could be more likely to sustain major losses due to fire if no one is around to report the blaze.
- The condition of the home: A well-maintained vacant property is typically cheaper to insure, since it’s better equipped to withstand environmental threats.
- The duration of your vacancy: Pricing may be more affordable for a temporarily unoccupied property (e.g., a home undergoing renovations) than a permanently vacant one.
- Your claims history: Like any homeowner’s policy, vacant home insurance will cost more if the property owner has a history of multiple home insurance claims.
Because coverage options vary so significantly between insurers that offer coverage for vacant property, it’s best to prioritize coverage before making price comparisons.
How to get vacant home insurance
If you need to insure a vacant home, start by identifying insurers in your area that offer this type of home insurance coverage.
Request quotes from multiple trusted Canadian insurers to find the best coverage for your vacant home at the right price. You may need to discuss specific policy terms, endorsements, deductibles, and exclusions with an insurance advisor before finalizing your policy.
Checklist before leaving your home vacant
If you plan to leave your home vacant for any extended period of time, consider taking the following steps to secure it and ensure that you’re financially covered:
- Inform your insurer: As soon as you’re aware that your home will be vacant, contact your insurance company to discuss coverage options.
- Secure the home: Make sure that all entry points (i.e., doors and windows) are locked. If your home has a security system, consider keeping it active, particularly if you plan to return to the home after vacancy.
- Document property condition: Take note of the condition of the property at the time of vacancy so that you can later document any damage it might sustain while you’re away.
- Arrange regular check-ins: If your home is vacant during a vacation, make arrangements for a friend, family member, or employee to check on the property every few days and perform routine maintenance for the driveway, walkways, and yard.
- Turn off the water: Shutting off the water supply can prevent water damage, such as from burst pipes, that would not be covered while your home is vacant.
FAQ: Vacant home insurance
This article is for general information only and is not insurance or legal advice. Examples and any sample quotes or rate ranges are illustrative and do not constitute an offer or guarantee of coverage, price, or eligibility. Actual coverage, discounts, and premiums depend on your individual circumstances and the insurer provider; if there is any discrepancy, your policy and insurer documentation govern. For advice about your situation, speak with one of our licensed insurance professionals.