Most homeowners understand that their insurance policies exist to protect their physical dwelling and to give them a degree of liability cover for injuries to visitors. Most don’t realize, however, that not being at home when disaster strikes is actually the easiest way to get your claim denied!
Want to collect? Be at home!
For instance, in 2008, a California resident was overseas on a business trip when his home in Santa Barbara was destroyed by a wildfire. The man had been away for 5 months. When he returned and filed a claim on his homeowners insurance for an estimated loss of $400,000, his insurer declined to pay. Why? He didn’t let them know that no one was living in the home.
In a similar set of circumstances, a homeowner moved to Florida leaving a home in Maryland vacant for four months. A small leak caused catastrophic damage in two rooms, including mold and mildew. The claim for $80,000 resulted in a $9,500 check, justified by the insurer, again, because the house was vacant.
The insurers are, frankly, taking a not unreasonable stance in cases like these. The assumption is that had a homeowner been present, steps could have been taken to mitigate or prevent the damage. In the case of the wildfire, the owner might at least have evacuated with his possessions. As for the leak, it likely would have been found and repaired much sooner if the home had been occupied.
Even Vacant Home Coverage Doesn’t Always Work
But even when you do the right thing, the outcome isn’t always what you want. In a move from Pennsylvania to Ohio, the homeowner took out a specific vacant dwelling insurance policy that was in place within 10 days of the time the moving trucks pulled out of the drive. And that’s the first clue to what happened. That ten day gap.
During that time, an 85-foot tree crashed through the roof and caused $120,000 worth of damage. His old insurer wouldn’t pay up because the house was vacant, and he hadn’t read the fine print on the new coverage, which was technically a “dwelling” policy. The language stipulated eight named perils. A falling tree was not one of them!
Homework is as Important as Home Occupancy
These are all instances where it didn’t matter if the homeowners insurance had been inexpensive to maintain over the life of the policy or not. The cost suddenly became very expensive when large claims were filed and denied. Unquestionably, using online tools to compare rates is still your best defense, but even that doesn’t do you any good if you don’t read the policy.
It is a costly mistake to assume, under the terms of any insurance policy, that you are covered against a particular risk. If you find the policy language mind-numbing to read, call up a company representative, explain the circumstances, and find out how the policy does or does not apply.
Now. Granted. You’re likely not going to call and say, “If I moved and my old house was vacant and a tree fell on my roof, would I be covered?” The right question would be, “I’m moving on May 1. My vacant home policy goes into effect on May 10. If something happens during the gap, am I covered?” And the assumption is that you would also ask specifically what the new vacant home policy covers.
But in the end, the most important thing to cover are your own bases. If the insurer can get out of paying, they will. Every time. To them it’s a matter of profit versus loss. Pure and simple.