If you’re on a road trip, a “No Vacancy” sign can be bad news; it means you probably have to continue driving until you find a place to stay. But in insurance, no vacancy is a good thing; to be fully covered under many homeowners policies, your dwelling should be neither vacant, nor unoccupied.

Unfortunately, occupancy provisions in insurance policies are often not recognized by insureds until they incur some sort of loss and their claim is denied by the insurance company. Read more here about the importance of occupancy provisions to make sure your policy fully protects your property.

What Is the Definition of Vacancy in Insurance?

Most insurance policies define a property as vacant when it has been unoccupied and without utilities or contents for 30-60 days; these vacancy provisions exclude all coverage if a building is vacant beyond the specified amount of time.

Policies can also have their own definition of vacant, or even leave the term undefined; in that case, policyholders need to look to the common dictionary meaning of the word. Even if the loss is covered, this provision can still reduce the amount a homeowner is able to recover by 10-15%.

What Is the Difference Between Vacant and Unoccupied?

While both vacant and unoccupied buildings lack human habitation, a vacant property is empty of personal belongings, including furniture and appliances; an unoccupied property retains most of its contents. An example of an unoccupied property is a house that is empty while the owner is on vacation: It is temporarily empty of people. A vacant property is empty of both people and things; for example, a rental home that is temporarily between renters would be considered vacant.

Insurance definitions of vacancy can change, however, which is why it’s so important to read your policy carefully.

How Long Can a House Be Vacant Before Insurance Is Voided?

Typically, a house is considered vacant once it’s been empty for 30-60 days, though the exact answer varies by policy; it’s important to read your policy carefully to understand your exact coverage.

Insurance companies rely on a vacancy provision because a vacant or unoccupied home increases the loss potential in their eyes. A vacant property is at a higher risk of loss from perils such as fire, vandalism, theft, water from leaking or broken pipes, mold, and weather-related damages, because nobody is present to tend to the dwelling. Further, damage in unoccupied or vacant dwellings can go undetected for long periods of time, increasing the value of the loss.

What Happens to My Homeowners Insurance if I Move Out?

If you move out of your home, you must adjust your homeowners insurance policy, paying special attention to any occupancy or vacancy clauses. The exact adjustments depend on your circumstances.

For example, if you’ve moved into a new home while your former home is for sale, you need to maintain coverage on your former home until closing, when you should cancel your homeowners policy.

Or, let’s say you’ve moved and you’re hoping to rent out the house; you need a landlord policy that specifically covers rental properties. Make sure you understand your policy’s provisions for vacancy between tenants.

If the home remains vacant for some time, consider a vacancy permit endorsement, which suspends the vacancy exclusion. Unfortunately, this typically requires an additional premium. Keep in mind that insurance companies don’t consider homes “under construction” to be vacant.2

No matter what you choose, make sure you maintain proof of coverage on the vacant property, and keep your insurance company informed of changes in your circumstances.

Can I Sue My Insurance Company for Denying a Claim Due to Vacancy?

Yes. If you have experienced a loss and fear that the home may have been vacant by the definition, it is important to hire an experienced property insurance attorney to help you with your claim.

Here’s one example: Most courts in Texas have held that the term “vacant” is not an ambiguous term when it is not defined. They have also upheld the vacancy provision all the way up to the Texas Supreme Court in Greene v. Farmers Insurance Exchange.1 In its decision, the court found that, when the homeowner vacated the dwelling and no longer resided there, full coverage remained in place for 60 days after the vacancy date, after which there was no coverage for the home.

Vacancy provisions apply to commercial properties too, making it a good idea for property owners of all kinds — especially those with seasonal businesses —  to carefully review their policies.

Further Resources on Insurance Coverage Law

Navigating the complexities of insurance claims can feel overwhelming. Whether you’re facing unpaid claims or simply filing for the first time, our eBooks equip you with the crucial information you need to advocate for yourself with confidence.

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1 Greene v. Farmers Ins. Exch., 446 S.W.3d 761, 2014 WL 4252271 (Tex. Aug. 29, 2014).
2 Columbia Lloyds Ins. Co v. Mao, 2011 WL 1103814 (Tex. App. Fort Worth, March 24, 2011 no pet.).