Literally 5 minutes ago I got off the phone with a big client who has investments in roughly 15 different homes, and he gave me some information I dropped my jaw to.  His file was brought to me already having been established, and my job was simply to input information on his ever growing list of homes and get the binders to the lenders in a timley manner (less then an hour if we can reach the insured).  The agent on record requested all Dwelling Fire policies, meaning the insured was using all his properties as daily rentals.  This was what she asked for, so it was what I gave her.  Now for the jaw dropping part...this agent was unavailable for a time so the insured had to skip his usual middleman and go straight through me for once, where in discussion I discovered that most of these properties are actually being majorly renovated and flipped, or remaining vacant until the market changes!  A million different bad scenarios ran through my head as I thought about the coverage he would not have for a vacant home or home currently undergoing major remodeling under his current rental policies! 

Needless to say, I contacted the in force agent immediatly and discussed with her the occupancy information she had given to me, apparently based on assumption.  Basically feeling responsible and decieved at the same time, I have since started the long repair process with the insured.  He has, after all, signed off on all of these policies as being rentals and nothing more not knowing the real importance of the Insurance Company knowing the true occupancy level of the home.  There are much higher risks in a home being remodeled or that is currently vacant than one with daily occupants and caregivers, and the companies can prepare for these risks and protect them only when they are disclosed.  True these policies are often higher priced, but in the case of a disaster wouldn't you rather have a slighlty higher premium then a denial of claim?

Here are some key questions to ask your insurance agent, especially if they don't ask you!!!

1. For those nifty flippers: Will I be covered while doing my remodeling?  (Make sure to tell them exactly what types you will be doing.  If it is structural like knocking down walls you will probably need an extra policy, as compared to just changing the carpet and paint)

2. For sellers: Will my house be covered while it is being sold and sitting vacant?

3. For Landlords: Will my coverage be in force if vacant between renters?

The occupancy of your home is crucial.  If it's your primary home, seasonal home, vacant dwelling, rental dwelling, needs help dwelling, new construction home, etc....Let your Agent know and protect yourself from assumption!