Vacant home horror stories - Don't let this happen to you!

Published: 10th March 2009
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Don't let these things, described below, ever happen to you if you leave your home unoccupied, vacant, or you find a renter to live in your home. Invest in vacant home insurance.

$400,000 Wildfire claim uncovered due to owner being away from the home

A computer programmer working for a big Silicon Valley technology company was sent overseas in 2008 to the Philippines to finish a computer installation. He owned a small home in Santa Barbara that was destroyed by a California wildfire after the house had been unoccupied for 5 months. When he filed a claim with his insurance company after a 15 hour flight back to the U.S. the insurance company denied the claim sighting the fact that he never alerted the insurance company that no one was living in the home. It was true, the insured never had written a letter advising the insurer of the situation. Unwilling to absorb a $400,000 loss himself, he hired a lawyer and is attempting to sue the employer who never advised the employee of the risk or provided a solution before he was sent overseas on the grounds that the employer created the situation that caused him to lose coverage and thus the employer was liable.

Homeowner forced to absorb 80% of a claim himself due to vacancy provision

An employee had moved to Maryland and was attempting to sell a Florida home, which had been completely vacant for over 4 months. A small water leak went undetected and two rooms in the house were completely destroyed by water, mold and mildew after the leak was discovered by a realtor. Expecting the insurer to honor the $80,000 claim, the insured was shocked to receive a check in the mail for just $9,500. It was explained to the insured that this was the amount the insurance company was willing to pay because this would have been the extent of the damage if the insured had been living in the house, and the leak would have been discovered promptly and fixed quickly. The nearly $70,000 was the difference that the insured was expected to absorb related to the house being vacant.

Vacant dwelling insurance policy assumed to be the same as HO3, leaving the insured holding a large loss.

A resident of Pennsylvania took a job in Ohio, and did the right thing by placing a vacant homeowners insurance policy on the home within 10 days from the date all the property was trucked to Ohio. The existing insurance company was willing to take the risk in this case and the owner though he was fully protected. When a 85 foot Sycamore tree crashed down through the roof and deck, causing $120,000 in damage, the owner was shocked to find out he had no coverage under the vacant home policy he had secured, assuming coverage was the same as the insurance policy he had with the same insurer while he was living in the house. He was unaware that the new coverage was called a "dwelling policy" and only 8 named perils were covered, and this loss, due to a tree falling was not covered by the insurance policy he had, leaving him holding the full extent of the loss. It's critical to find the right vacant home policy not just any vacant home policy!

Homeowners claim denied when they failed to put in the proper landlord / tenant policy.

When a homeowner and his family took a job working in the United Kingdom, they were pleased that the neighbor's son had just returned home from law school and they asked him to live in the house while they were away for 2 years. The family did not even think to alert the insurance company in this situation because the house was not vacant, but was in fact being lived in. After a kitchen fire (which was quickly put out) caused $16,000 in damage 14 months into the expatriate assignment, they were shocked to find out they had no coverage for this claim. They had failed to put a landlord / tenant policy on the home, even though the tenant or boarder was not actually paying rent.

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