Every time I look at listings on the MLS (I always like to keep up on new listings) I see pictures of houses that are clearly vacant. I can't help but wonder if the seller has notified their insurance agent or not. On the flip side about once a month lately we get a forwarding notice for someones home insurance who has not notified us they moved out.
As a Realtor you would be doing your clients a favor to remind them to notify their insurance agent they are no longer living in the home. Why? Because the standard home insurance policy used by many insurance companies is not designed for vacant homes and it has exclusions that could create huge gaps in coverage for vacant properties.
Lets say a seller buys a new house and can't sell theirs. They move to the new property and their other house sits empty for a few months. When the Realtor goes to check on the house before a showing he or she notices a broken window. Inside the house, what drywall isn't spray painted is broken and there is water running throughout the house. While it's a huge mess, it's no problem because the seller has insurance. Right? Probably not. Typically vandalism and malicious mischief is excluded if the house is vacant. Also excluded is any ensuing loss caused by the vandalism. It could cost the client tens of thousands of dollars to repair, not to mention the amount of money lost in carrying costs while the home is repaired. If the water has been running for a long period of time there could be even bigger issues with mold and the like.
So what happens if the client does notify their agent they've moved out? Well, to be honest, it's likely their home insurance policy will be canceled in 30 days. They will have to get a special vacant dwelling policy which should be available from any independent insurance agent (or at www.brouwersagency.com). Yes, it does cost more than a standard home policy, but what's the point of paying for the standard policy if you have no coverage anyway?
It's unlikely that vandalism is the only vacancy exclusion in the policy, so your clients should always contact their agent to make sure they're properly covered.
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