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Insurance on Vacant Buildings


Insurance companies take vacancy of buildings very seriously. The experience historically has not been good so the rules for this situation are quite stringent. We are referring to properties such a house or hog barns. We are not talking about machine sheds and grain bins as they are often 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.

Every company deals with this slightly differently but the common theme is talk to your broker before it becomes vacant. At the very least it is helpful to be informed to allow for the most proactive approach to this situation.

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