The slumping real estate market means lower selling prices and more vacant homes for sale, and that can lead to increased insurance risks. In March 2008, approximately four million homes were for sale in the U.S., and in the past year the median existing home price has dropped almost 8 percent, reports the National Association of Realtors. That could mean a longer wait to sell your house.
If you move to a new home before yours sells, the property is at greater risk of damage and you may not have adequate coverage. Cindy Woodford and Jon Farris of QBE Regional Insurance offer advice to ensure vacant home owners are protected.
“An empty house can become a teen hangout or a place for a homeless person to sleep,” says Woodford. “Uninvited guests can lead to damages like theft, fire or vandalism. Mother Nature can also be a foe, leading to flooding or fire. We encourage owners to take a few precautions and protect their investment before they move out.”
The U.S. Census Bureau reports a record 18.6 million properties sat vacant during the first quarter of 2008. On average vacant homes take longer to sell. Individual homeowners policies will vary, but standard homeowners insurance programs only insure a vacant home for 60 days – which might leave you short on coverage.
“Talk to your independent agent about your policy and what else is available. Their job is to help make sure you’re covered,” says Farris.
Some specialty insurance companies will insure vacant homes for longer time periods. Coverage may also be available through some state-run insurance plans, such as Fair Access to Insurance Requirements.
Before you go
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There are many precautions to protect your home from risks, notes Woodford.
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Clean out gutters, trim trees, and check for potential leaks.
Install and test smoke alarms that will alert a central service center if smoke is detected.
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Install a home security system.
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Make sure you have adequate locks on windows and doors, and they’re secured when leaving.
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Make the home look lived in. Have an acquaintance bring in mail.
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Shovel sidewalks and driveways or cut the grass.
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Ask a neighbor to park their car in the driveway.
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Install timers on lights and leave window coverings and some furniture in the home.
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Winterize your home, where applicable.
Protection from the elements
If you live in a northern climate, protect your pipes from freezing. A power outage and loss of heat can result in burst water pipes and flooding – a common loss that can lead to thousands of dollars in damages from water and mold. “This is an easy procedure that homeowners can do themselves,” says Farris. “Turn off the main water source and drain the pipes by running water from the sink located at the lowest point in your house, such as on the basement or ground level.”
Set your home’s thermostat to at least 65 degrees. Ask a trusted acquaintance to check on your home occasionally to ensure your heat is working, and install a heat or moisture sensor that will notify a service center if the home becomes too cold or damp.
Additional measures
If you’re still concerned about your home’s safety, Woodford suggests that a friend or relative live in the home until it sells. If the occupant doesn’t pay rent, your homeowners policy could remain in effect, but because individual homeowners policies vary be sure and talk to your independent insurance agent first.