Can you please explain a vacancy permit?

A majority of home and commercial insurance policies will not cover a property that remains vacant for a period of time. In order to prevent a lapse in insurance, you will need to buy a special rider, called a vacancy permit, which covers the increased risk of insuring the vacant structure.

Empty buildings attract unwanted attention and there is always a higher risk for the insurance company. They would prefer that the building was occupied because it would be less likely to be vandalized or burglarized. Instead of increasing the rates for all property owners in general, they add special coverage only when it is needed.

The period of time a property can remain empty before it is considered vacant varies from one insurance company to another, but it is rarely more than 90 days. After that, your existing policy can be terminated unless you apply for a vacancy permit. If the building is in an area with a higher than average crime rate, you may be expected to have a vacancy permit within as little as 30 days. Read your policy carefully or contact the insurance company.

If you do not get a vacancy permit, the insurance company will deny any claims you file. Your policy probably contains a vacancy clause that specifies how long the property can remain empty, and after that you would lose your liability coverage and be responsible for anything that happens on or to the property. Having a vacancy permit could save you thousands of dollars in legal or medical costs.

If you have an alarm system, that will give you a break on the insurance. Other savings will come from having a fence around the property, deadbolt locks on a doors, and burglar bars on the ground floor door and windows. Each of these things lowers the risk of insuring an empty property and the savings are reflected back as discounts on your policy.