Who is Living in Your Home? 3 Changes that Require a New Insurance Policy
Every week I get numerous phone calls from people asking me a simple question such as “Am I covered for this?” or “Do I have a payment due?” and the conversation ends up with me uncovering a change of circumstance that affects coverage. Most often the change is that the insured is no longer living in the home – the owner is now renting the home to someone else, or it is sitting vacant. Or it’s just a part-time residence for the owner now.
Each of these changes requires a different type of policy to properly cover the home before a loss occurs. Unfortunately, because often the homeowner doesn’t know this, by the time I get a call regarding a claim, it is already too late.
Here are some scenarios I commonly come across. Please consider these carefully so you can prevent this from happening to you.
You have moved and now a friend is renting your property. You are still the owner, but since you are no longer living in the home, you now need a “rental/landlord” policy. This will cover the structure of the home, as well as liability if someone should get injured on your property. You can also choose to add on other coverage as needed, but this makes the renter responsible for getting his/her own renter’s policy to cover his/her personal property. Be prepared to pay more for this type of policy, but understand that it is necessary for your home to be covered properly, should you ever have a claim. (The higher rate is due to the fact that all companies, from experience, see this as a higher liability risk because tenants in general do not take care of the home the same way a homeowner does, and are more likely to cause damage due to negligence.)
You have moved out of your home to a beautiful new home out of state. Do not leave this home sitting there long under a homeowners policy format. There is a “vacancy clause” on all homeowners policies, that after a home has been vacant for more than 45-60 days (depending on the company), if a claim is filed for any reason, it can be denied completely or your payment reduced to half or less. Call immediately to let your insurance company know, and get a quote on a “vacant” policy for your home. This policy also has a higher premium on average, because of the increased risks associated with vacancy (a home that is completely unwatched/unprotected is a vandal or burglars’ dream), but will offer the proper coverage needed to protect the home. The vacant policy will offer coverage, similar to that above, for the structure and for premises liability, as well as for “vandalism and malicious mischief.” This will cover you for those not-so-kind visitors who may think to spray-paint your unattended home, or possibly break your windows or damage your siding.
You have a home in Colorado, but have purchased a home in Arizona or California to get away from the snow during the winter. You will still be living in Colorado for some of the year, but will now be sharing time between the two. If the time will be equal, six months at each, two normal homeowner policies will be needed. However, if you will now be spending time at one more than the other, the one you spend the most time at will need the normal homeowners policy, and the other home will need to be protected by a seasonal homeowner policy. The coverage is very much the same as the traditional homeowners policy, but alerts the company to the fact that the home will not be occupied for a good portion of the year. The seasonal format also encourages you to discuss with your agent how much coverage is needed for specific areas (such as your personal effects), etc., whereas that would be automatically covered for an included amount on a normal homeowners policy. Your agent can explain the difference and make sure you have the coverage you need.
It is extremely important to call as soon as your circumstances change. This is key to whether a claim is covered or not. You company needs to know who is in your home, how often, or if nobody is there any longer. A homeowners policy assumes YOU, the named insured, are there full-time in the residence, so if you no longer are, do not hesitate to call to let your insurance company know. As circumstances change, so does the coverage needed for your home. (Even if you get a PO box, or a new phone number, let them know; communication and transparency are key.)
If you are not already insured, and you need help with any of these kinds of policies, give us a call. At USA, we work with numerous companies for all the various policies necessary to protect your property.