95% of house owners don't understand what happens to their insurance on the home when the house becomes empty or unoccupied. This is often how owners find themselves with no coverage after submitting a claim and the insurance company learns the house wasn't occupied at the time of claim.
Every home-owner's insurance policy is totally different, but one issue is for sure. Owners insurers will not continue to insure a home, if the house isn't being lived in by the primary homeowner. A house that is completely vacant (moved out) will end insurance more quickly than other situations.
Right now, there are thousands of homes that haven't any insurance coverage, but the homeowners believe the house is fully covered as a result of they simply do not grasp the provisions of their insurance policy.
Put simply, individuals don't seem to be aware that they're risking everything. Common examples of cases that result in the house being considered vacant are:
o House sits empty for ninety days whereas the house owners have moved out of state and are awaiting the old home to sell o A house is unoccupied for seventy two days whereas the children decide what to try and do with the house of a deceased parent o A townhouse sits empty for five months whereas the owner, a college faculty member, is teaching a semester abroad. The professor thinks the house will be covered because he asks the neighbor to check in on the house o An expatriate resides abroad while his house back within the US is being lived in by a friend. He failed to bother to inform the householders insurer and switch the policy over to a landlord policy. The fact remains virtually everyone in these types of things don't perceive the risks involved.
If there have been a claim in one of those things, the owners insurance company may deny the claim and refund some months premium, canceling the policy.
For instance, a washer hose leak could be a common claim. If an owner had come home after work for example to find the hose leaking, the claim could have been contained. Instead, the owner is not living in the house and the hose leaks for 9 days till the owner's sister comes into the house to check on things. In this example a $10,000 claim has turned into a $100,000 claim as a result of three floors being ruined and 12 of the walls are currently infested with mold and rot.
But, the owner is shocked to learn that they are only eligible to receive $10,000 from the insurance company and the full extent of the damage is not being covered. Again, all of this assumes the insurer is generous enough to produce any coverage in the least in this case! In several cases, this claim would be totally denied, with the insurer claiming the house was vacant and therefore the owner did not inform the insurance company of the situation. However, expecting a claim to be covered for $100,000 in this instance, and receiving a check for 1/10th of this quantity comes as a shock to the home owner.
Another great article by Aurora real Estate
