The Empty House and the Insurance Policy
"It can cost about 50% to 60% more than a regular one."
Picture a couple named Stan, 67, and Iris, 66. Their house is paid off and worth about US$500,000. They plan to leave in November and come home in May. Stan has used the same insurance company for over twenty years. "They know us," he said. "It will be fine."
Iris wanted to hear it from the company. She phoned the agent, who has known them for years, and asked what the policy says about a house nobody is living in.
The agent was kind. She found the clause and read it aloud. Many policies have a clause about homes left empty for 30 to 60 days, and it could limit what the policy pays. Stan and Iris would be gone for about 180.
"Is there something else we could have?" Iris asked.
"A vacant-home policy," the agent said. "It can cost about 50% to 60% more than a regular one."
Iris wrote it on the back of an envelope. She noticed the two policies are not the same product. For the first 30 to 60 days the regular policy covers the house in full. After that it may pay much less, or nothing, for some kinds of loss. The vacant-home policy keeps covering the house while it is empty. So she wrote the cost of each next to what it protects.
| Per year | Regular policy | Vacant-home policy |
|---|---|---|
| Insurance | US$3,000 | US$4,500 to US$4,800 |
| Extra cost | US$0 | US$1,500 to US$1,800 |
| Whole house, from the US$14,900 total | US$14,900 | US$16,400 to US$16,700 |
| Cover while the house is empty, after 30 to 60 days | Limited or none (ask in writing) | Full, as written (ask in writing) |
The vacant-home line is 3,000 plus 50% (4,500) or plus 60% (4,800). The whole-house line adds the extra to 14,900.
Stan read the envelope. "We would pay up to US$1,800 more to insure a house with nobody in it."
"We would pay it so that a pipe in January is covered," Iris said.
"We have never made a claim."
"I know. I would like to know what happens the first time we do."
Iris then did one more sum, to see the scale. Suppose a burst pipe in the empty house caused US$30,000 of damage and the company refused it. That is an illustration, and a contractor could give a real figure. US$30,000 equals 17 to 20 years of the extra payment (US$30,000 divided by US$1,800 or US$1,500). If a claim like that came within that time, the extra cover would have paid for itself. If not, it would have cost more than it returned. That is how insurance works, and it is why the decision is about the size of the loss they could not absorb.
Stan was quiet. He did not like paying for something he hoped never to use. He also did not want to be the one explaining a refused claim to Iris in the spring.
Iris asked the agent one more question. Their son Josh lives forty minutes away and could stay at the house a few nights each month. Would that change the answer? The agent said she did not know, and that she would ask the company and send the answer in writing. A week later a letter came. Stan filed it in the same drawer as the deed.
You could…
- Phone your insurer and ask what the policy says about a house empty for 30 to 60 days.
- Ask for the answer in writing, along with the price of a vacant-home policy.
- Ask whether regular visits from a person you trust change the answer.
- Ask what the repair of a burst pipe would cost in your house, to set a real figure beside the extra premium.
Did your insurer's answer surprise you? Tell us below what your insurer said. A reader leaving next month with the question still unasked could ask it sooner.
Figures are estimates for planning, based on public data.
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