Don't Assume You Are Covered...

Real Estate Agent with Keller Williams Realty

Purchasers who move into their new homes in advance of selling their existing property are potentially at risk with their insurance carrier. The standard homeowners policy is written to protect your primary residence and is presumed to be owner occupied (versus a second home policy or investment property policy).

The policy language is very specific regarding occupancy. It also states that the insured is responsible to notify the carrier of any changes regarding occupancy.

If you vacate your house and subsequently sustained damage or had to make a claim for any reason, your insurance company can, and likely will, deny the claim. I had a vacant listing hit by copper bandits...claim denied. It has become epidemic in many communities. Insurance companies are well aware of the trend and will enforce policy language to reduce payments on claims.

The simple solution is to call your agent and notify them of the occupancy change. They will likely change your policy, and charge you more, but you will have valid and enforceable coverage in place. Many carriers will allow a short grace period and pay some claims on vacant properties, but per the policy language, they don't have to. Are you feeling lucky ?

Comments (3)

Don Lantier
Donald J Lantier Realty - Smyrna, GA
Broker/Owner of & HouseTour4
very good points and very true
Sep 18, 2007 01:08 PM
Birmingham Alabama Real Estate, Stephen Wolfe - Birmingham, AL
Ricky, great point. I think, as part of our fiduciary responsibility, we ought to be educating our clients about such changes. With accidents like the theft becoming more common we need to make sure our clients are protected.
Sep 19, 2007 03:34 PM
Todd Clark - Retired
eXp Realty LLC - Tigard, OR
Principle Broker Oregon

This is great advice and something most people don't think about calling on and the insurance company isn't going to remind you!

Sep 25, 2007 05:58 PM