The investment property you bought to make some extra cash is now sitting empty. Whether you’re in between renters, doing some minor renovations, or planning to sell, don’t forget to protect your investment with a vacant dwelling policy that best fits your needs and budget. When it comes to insuring unoccupied properties there are many considerations that are taken into account to find the perfect coverage for you.
What is Vacant Dwelling Coverage?
This coverage is just as it sounds, an insurance policy specifically for unoccupied properties. Standard home insurance policies do not offer coverage for vacant homes because once a home is empty it now comes with different risks that need to be addressed. Different types over coverage are available depending on the type of property and the reason for vacancy.
Standard Vacant Dwelling Policy
The first type of policy available for vacant property is the basic policy, known as a Dwelling Fire Policy (DP1). This policy protects the building from a list of special hazards and excludes all others. Windstorm, hail, vandalism, fire, smoke, lightning, explosion, sinkhole collapse, vehicle damage, aircraft damage, and volcanoes are all covered perils under this type of policy. Theft, water damage, and falling objects are the biggest exclusions on a DP1.
Whether your property is going to be vacant for one month or more than a year a DP1 policy is the best option to provide standard coverage to your investment, especially during hurricane season. DP1 policies typically only provide actual cash value loss settlements, but replacement cost coverage may be available.
The conditions for a DP1 differ from a standard landlord’s policy. For example, several insurers allow for multiple properties to be covered under the same policy, making it convenient for investors to add and remove insurance from properties as they buy and sell. Instead of the standard one-year contract for home insurance a DP1 can be available for increments of months, which is great for short-term unoccupancy.
Builders Risk Policy
If you are doing major renovations on your vacant home or if the home is under construction you will need a specialized property policy, referred to as a Builders Risk. While the specific coverages differ based on the property and project, this policy typically protects the property from theft, vandalism, windstorm, fire, and earthquakes. These coverages also extend to the materials and equipment being used for the renovations. Additional policy endorsements may also be available such as coverage for costs incurred due to a delay in completion of the work being done and debris removal.
Which Coverage is Right for Me?
When it comes to insuring your vacant property there is not a one-size fits all coverage option. Policy coverages and premiums differ based on the home’s location, value, features, and length of vacancy or renovations. Contact the Viera Insurance Agency team to find an insurance package that best fits your needs.
The first type of policy available for vacant property is the basic policy, known as a Dwelling Fire Policy (DP1). This policy protects the building from a list of special hazards and excludes all others. Windstorm, hail, vandalism, fire, smoke, lightning, explosion, sinkhole collapse, vehicle damage, aircraft damage, and volcanoes are all covered perils under this type of policy. Theft, water damage, and falling objects are the biggest exclusions on a DP1.
Whether your property is going to be vacant for one month or more than a year a DP1 policy is the best option to provide standard coverage to your investment, especially during hurricane season. DP1 policies typically only provide actual cash value loss settlements, but replacement cost coverage may be available.
The conditions for a DP1 differ from a standard landlord’s policy. For example, several insurers allow for multiple properties to be covered under the same policy, making it convenient for investors to add and remove insurance from properties as they buy and sell. Instead of the standard one-year contract for home insurance a DP1 can be available for increments of months, which is great for short-term unoccupancy.
Builders Risk Policy
If you are doing major renovations on your vacant home or if the home is under construction you will need a specialized property policy, referred to as a Builders Risk. While the specific coverages differ based on the property and project, this policy typically protects the property from theft, vandalism, windstorm, fire, and earthquakes. These coverages also extend to the materials and equipment being used for the renovations. Additional policy endorsements may also be available such as coverage for costs incurred due to a delay in completion of the work being done and debris removal.
Which Coverage is Right for Me?
When it comes to insuring your vacant property there is not a one-size fits all coverage option. Policy coverages and premiums differ based on the home’s location, value, features, and length of vacancy or renovations. Contact the Viera Insurance Agency team to find an insurance package that best fits your needs.
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