Is Your Short-term Property Covered When Unoccupied?

As the seasons change, business fluctuates, causing uncertainty to fill the air. Winter can be a time when reservations are low, and your to-do list is long. These dry spells can leave your place as empty as a ghost town. And let's not forget those renovation stints that leave your rental gathering dust and without guests for a month. Does this mean you need vacant property insurance or is your property covered even when it’s unoccupied? Keep reading to find out.

The Difference Between Vacant & Unoccupied

While vacant and unoccupied sound the same in theory, there’s quite a difference between the two in terms of insurance. Generally, the word vacant means to be completely empty, as there are no people in the property or personal assets such as furniture. Vacant properties typically have a greater risk of vandalism. To protect a vacant property, you will most likely need vacant property insurance.

An unoccupied property on the other hand means that all possessions are within the property – and presumably the property is still available to rent. To classify a residence as unoccupied, it must contain a sufficient inventory of items, including essential household appliances such as a microwave or refrigerator, as well as basic furniture such as a sofa, table, bed and chairs.

In instances where a property is genuinely unoccupied, such as in the case of a vacation home or a short-term rental left unattended for an extended period from a decrease in reservations, standard coverage will continue to apply.

Unoccupied During Renovations or Construction

If your property undergoes any type of renovation and the project is still able to accommodate the retention of furniture and personal belongings, it’s generally categorized as unoccupied. However, when the insured temporarily relocates to facilitate the renovation and the property is emptied and stored elsewhere, it’s classified as vacant. If the nature of the project is more significant than a small renovation project, such as replacing the floors or anything that affects the structure, you would need builders risk.

Builders risk insurance is a specialized type of property insurance intended to protect buildings and structures under construction. These policies protect project owners, general contractors and subcontractors against direct physical loss or damage to covered property. Builders risk coverage ends when the project is complete. Our team can help you verify whether you should purchase this coverage, based on the details of your renovation project.

Let Your Insurance Provider Know It’s Vacant

Policyholders should notify their insurance company if the home is going to be vacant for any period. Insurance companies frequently modify or customize their policy’s vacancy clause. It’s always wise to consult with your agent before making sudden changes to your policy, as you may need to temporarily modify your insurance coverage.

Coverage That Won’t Leave You Feeling Deserted

Regardless of what type of property you own or what phase it’s in, we offer a broad portfolio of property insurance solutions to fit your needs, including builders risk coverage. Have peace of mind knowing that your property is adequately protected, and you’ll always have a team to fall back on. Connect with a team member today at CBIZ Vacation Rental Insurance and request a free quote.

This blog may contain scenarios that are provided as examples only. Coverage is subject to the terms, conditions and exclusions of the policy issued. The information provided is general in nature and may be affected by changes in law or the interpretation of such laws. The reader is advised to contact a professional prior to taking any action based upon this information.

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