Vacant Building Insurance

Updated: 29 February 2024

What Does Vacant Building Insurance Mean?

Vacant building insurance is a type of policy that insures a vacant (or unoccupied) residential or commercial building. They can either be purchased by commercial clients, such as landlords or investment fund corporations, or personal customers buying houses that will temporarily be without residents.

Insured buildings may remain vacant for some time for a number of reasons. Commercial premises could be newly constructed or between tenancies, while residential premises could be a house purchased from probate if a previous owner has passed away.

Insuranceopedia Explains Vacant Building Insurance

A vacant building represents a poor risk in comparison to occupied buildings and, therefore, coverage is often restricted to "catastrophe" perils (typically fire, lightning, aircraft, and explosion perils only).

These policies will often contain conditions that must be fulfilled in order to maintain the insurance and collect a claim in the even of a loss. They may, for instance, need to be inspected every seven days or have the letterboxes sealed. These precautions are meant to prevent losses from vandalism, which can be a real risk for conspicuously unoccupied buildings.

The coverage will also usually include property owners liability insurance, which can be very important since owners of vacant buildings have been sued even when trespassers sustained an injury on the property.


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