Will this affect the coverage under my policy?
Different types of homes have different insurance needs. Most homes become unoccupied for a period of time. If you go on an extended vacation, use your seasonal home only during the summer, or the tenants that rent your home are moving out and you don't have someone lined up to move in right away are all situations that commonly occur.
The purpose of this post is to understand when a home is vacant and what happens when it is. A vacant home is a serious matter from a coverage perspective.
The policy clearly spells out when a home is vacant.
Every policy has a section that defines important terms used in your policy. This is generally located near the front of your policy wording. Each policy may have different definitions so one policy may different from another.
The policy I am looking at right now defines Vacancy as;
Vacancy refers to the circumstances where, regardless of the presence of personal property, including furnishings, all occupants have moved out with no intention of returning and no new occupant has established a usual place of residence in the dwelling or building. For the purpose of clarity;
- occupants are deemed to have moved out when they cease to occupy the premises as their usual residence and have no intention of returning, even if circumstances where they return thereafter to clean the premises, remove personal property, care of the property, inspect the property or use the property on a casual or intermittent basis.
- no person shall be considered an occupant nor to have established usual residence in the dwelling where notwithstanding that the person shall have possession of the dwelling building, such possession is being exercised, not for the purpose of actually residing in the dwelling or building, but instead for purposes of inspecting, or of cleaning, repairing, painting, or otherwise preparing the dwelling or building for occupation as the person's usual residence, however, notwithstanding the foregoing, a newly acquired building which is to be occupied as your principle residence will not be considered to be vacant for the first 30 days after the title registers in your name.
NOTE = Your home is not vacant if you have gone on holidays and your belongings remain and you will be returning. Your home is not vacant if you only use it during the summer as in the case of a seasonal home. However, if you leave your home unattended for any length of time you should know what the requirements are under your policy for these situations. Also remember - if you have not been to your property at least once in the past twelve months your coverage will be terminated under most policies.
Note that each one of the restrictions below makes no reference to there being a time limit on when they take effect. This means the changes take affect immediately upon the home becoming vacant. The three things that change immediately are;
WATER ESCAPE, RUPTURE, FREEZING: This peril means:
a) accidental discharge or overflow of water or steam from within a plumbing, heating, sprinkler or air conditioning system, domestic appliance, swimming pool, hot tub and any attached
equipment and water mains;
b) sudden and accidental bursting, tearing apart, cracking, burning or bulging due to the pressure of water or steam, or lack of water or steam, in a plumbing, heating, sprinkler or air conditioning system or an appliance for heating water;
c) freezing of any part of a plumbing, heating, sprinkler or air conditioning system or domestic appliance within a building or unit for which the heat has been maintained during the usual heating season;
d) accidental discharge of water from a water bed or aquarium.
This peril does not include damage:
a) caused directly or indirectly by continuous or repeated seepage or leakage;
b) to the system or appliance caused directly or indirectly by rust or corrosion or deterioration;
c) to water mains, outdoor swimming pools, outdoor hot tubs or similar installations, or equipment attached;
d) caused directly or indirectly by backup, escape or overflow of water or sewage from a sewer, sump, septic tank, or eaves troughs or downspout connected to your sewer or from drains or public sewers outside your dwelling;
e) occurring while the dwelling or unit is under construction or vacant even if we have given permission for construction or vacancy;
f) caused directly or indirectly by freezing which occurs during the usual heating season if you have been away from your premises more than ten consecutive days. However, if you had arranged for a competent person to enter your dwelling or unit daily to ensure that heating was being maintained or if you had shut off the water supply and had drained all the pipes and appliances or
if your dwelling or unit is equipped with a 24 hour monitored low temperature alarm system, you would still be insured;
g) caused directly or indirectly by water escape, rupture or freezing of any outdoor appliance including piping or other equipment connected to said appliance used to heat the
described Dwelling Building.
Under this peril a plumbing system does not include sewers, sumps, septic tanks, weeping tile, eaves troughs or downspouts.
VANDALISM or MALICIOUS ACTS:
This peril does not include loss or damage:
a) occurring while the dwelling or unit is under construction or vacant
even if we have given permission for construction or vacancy;
b) caused directly or indirectly by you;
c) caused directly or indirectly by theft or attempted theft;
d) caused directly or indirectly by any employee, tenant, tenant's guest, tenant's employee, or member of the tenant's household. “Tenant” includes any person who has your permission to occupy your dwelling or any part of it
GLASS BREAKAGE:
If you are a homeowner or condominium
If you are a homeowner or condominium
unit owner, we insure glass that forms part of your dwelling, unit or
private structures on your premises, including glass in storm
windows and doors, against accidental breakage.
This peril does not include loss or damage occurring while a
building or unit is under construction or vacant even if we have
given permission for construction or vacancy
Since this coverage is lost as soon as your home is vacant you must contact your agent immediately if you want to see if it is possible to maintain the coverage.
Important - There are certain things you can do to lessen the possibility of an uninsured claim.
1. During the heating season make sure someone is checking the home at least daily so that if the furnace goes out it will be known before serious damage can occur.
2. Keep the grass cut and the yard tidy giving the impression that someone is living there.
3. Leave some lights on especially the outdoor lights. If window coverings exist close them so people can not easily see that the home is vacant.
4. Turn off the hot water heater and the main water valve which limits the possibility of water damage.
5. Talk to the next door neighbour and ask him to report to you if someone is hanging around the house.
6. Think about installing an alarm system.
6. Think about installing an alarm system.
IMPORTANT- If you do not advise the insurance company within 30 days that the house is vacant all coverage is lost (not just the three perils listed above)
LOSSES NOT INSURED
We do not insure:
1. loss or damage occurring after your dwelling or unit has, to your knowledge, has been vacant for more than 30 consecutive days;
2. loss or damage occurring after your dwelling or unit has, to your knowledge, been unoccupied for more than 12 consecutive months
Note that after thirty days of vacancy you lose all coverage under the policy unless you get permission for vacancy from the insurance company.
The insurance company will issue a Vacancy Permit for 30 days if they feel the risk is something they want to insure while vacant.
They will revisit their decision to insure your home while it is vacant every thirty days.
This is usually what the permit will say;
We grant permission for the property to be vacant for the vacancy
We grant permission for the property to be vacant for the vacancy
period shown on the Coverage Summary page.
Coverage ceases immediately with respect to these perils:
1. Vandalism or Malicious Acts;
2. Water Escape, Rupture, Freezing;
3. Glass BreakageIf you are moving from one home to another.
Your insurance policy may exclude your personal belongings that are left at the old residence while you are moving. Again - not all policies are the same. This policy does determine that your home is vacant as described above if this were to happen. Since it is vacant as defined, belongings not yet moved could be deemed not covered because the home is vacant and the belonging you have not yet moved are in a vacant dwelling.
Personal property usually kept throughout the year at any location you own, rent or occupy, other than at the location(s) specified on the Coverage Summary page, is not insured, but personal property in storage is insured as long as it is not in a vacant private dwelling, vacant private garage, or vacant farm outbuilding. Personal Property stored in a commercial building you rent or own is also insured but personal property in a vacant commercial storage building is not insured.
Best Advice - Contact your insurance provider immediately and advise them of your vacancy situation.
Verify what coverage you have while you home is vacant so you can take appropriate action to prevent and limit the size of an uninsured loss. Find out exactly what your responsibilities are - such as how often the property has to be checked.
As your insurance agent I am going to immediately fire off a request to the insurance company marked urgent, make sure it goes directly to an underwriter and not just the general mail box, and request coverage be extended without the restrictions. Success in maintaining coverage depends on the circumstances.
Make no mistake. The insurance company will enforce these restrictions and coverage lapses.
Here is an example of what can happen and how important it is to understand what is required.
Alberta family warning others to check their insurance policy, after business was destroyed by fire.
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