Vacancy Under The Homeowners Policy

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By Phyllis Van Wyhe, CPCU, CIC, CSP

Printable Version

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Unlike the commercial property forms, the ISO Homeowners policy does not contain a vacancy clause. However, when there is no one occupying or living in the home, there are three considerations.

Freezing of Pipes

Under the Homeowners policy, there is no coverage for damage caused by

"Freezing of plumbing, heating, air conditioning or automatic fire protective sprinkler system or a household appliance"

The policy goes on to state that this provision only applies

"while the dwelling is vacant, unoccupied, or being constructed, unless you have used reasonable care to

• Maintain heat in the building; or
• Shut off the water supply and drain the system and appliances of water."

This condition applies to both building and personal property.  It is listed as an exclusion in the open perils coverage provided for building under the Homeowner policy. With the named perils coverage on personal property, the condition is a restriction included in the named peril of Freezing.

WHEN YOU MOVE OUT

Another issue arises when the insured moves out of the dwelling and no longer resides there.  In the coverage grant for dwelling, one finds that the policy covers only the dwelling listed in the Declarations on the "Residence Premise."  When one reads the definition of residence premises one finds it is the dwelling "where you reside."

When the insured ceases to reside in the dwelling, the policy no longer provides any coverage for the home.  This provision has been tested and upheld in the courts. (For a more detailed discussion of this scenario see the article Case Study: Where You Reside.)

THE THEFT LIMITATIONS

Under some circumstances, there is a limitation on theft of personal property when the insured is not at the premises.  While not a vacancy consideration, it is a type of unoccupied exposure.  The restriction is found in the description of the theft peril and excludes loss to:

"property while at any other residence owned by, rented to, or occupied by an ‘insured,’ except while an ‘insured’ is temporarily living there."

Let us look at an example:

Bob and Betty Boop have a Homeowners policy on their primary dwelling in the metropolitan Detroit area, but do not have a Unit Owners policy on their condo in St. Petersburg.  They have the personal liability exposure for the condo covered by endorsement to their Homeowners policy and know that policy will cover their contents at another residence for 10% of their personal property limit.  However, if their contents are stolen from their condo, they must be in St. Petersburg at the time if they expect the coverage extension from their primary policy to apply.

The theft peril also carries a limitation on the property of a student away from home.

"Property of a student who is an ‘insured’ is covered while at a residence away from home if the student has been there at any time during the 45 days immediately before the loss."

The student, who goes home for the summer, leaving his computer and stereo in his dorm room, had better go back to campus and visit his possessions sometime in July if he hopes to have theft coverage.