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Insurance on Vacant Buildings


Insurance companies take vacancy of buildings very seriously. The experience with vacant buildings historically has not been good so the rules in this situation are quite stringent. We are talking about rental properties such as a house or office building. We are not talking about an empty machine shed or grain bin. These are typically empty on a seasonal basis and insurers understand this.

You have to notify your insurance company of a building being vacant. If you do not, it may nullify any coverage on the building. Every insurance company will have different ways of dealing with this situation.  Some insurers put a notice on your policy (vacancy permit) of its vacancy status and every 3 months you have to confirm this again with them in order to keep coverage in place. If it is forgotten and they are not updated of this fact again you are in jeopardy of having any coverage at all.

The level of coverage changes when a building becomes vacant. You no longer have vandalism coverage or water pipe breakage coverage. You may get 50% coverage at the same premium or you may be able to choose to pay a surcharge in order to maintain full coverage.

A building becoming vacant is never planned but it is advisable to notify your insurance broker as soon as possible to allow for the most proactive approach to this situation.

Be sure to seek advice and purchase insurance from those who understand your business!