Inexperienced homeowners and property investors will often look for an insurance policy that covers their structure and land. When an investor obtains a blanket policy, he might believe the coverage encompasses the items within the building, as well as the contents.
Homeowners and investors may also search for unoccupied home insurance and/or vacant home insurance, which are not considered to be the same coverage when claims are submitted. Understanding the differences between them, their policies and coverage is imperative to protecting assets.
Vacant and Unoccupied Defined
Many policies use the terms “vacant” and “unoccupied” as synonyms. As a policyholder, one must know that legally, these terms have specific differences. Vacant home insurance covers only the structural elements. A property defined as vacant means that there are no contents or people living inside the structure. In other words, every room in the home is empty for it to be considered a vacant home. If damages to contents occur under a vacant home policy, the contents will not be covered. This insurance is designed for property owners or investors who are trying to sell or rent a home that has been vacated; a home to which someone will eventually move in to. Banks that temporarily own homes will also protect their assets with a vacant home policy.
The term unoccupied home insurance is in reference to a home that may have furniture and other contents in it, but does not have people living in it. In the event of a named peril, the policy will cover the home and its contents when no one is currently living there. These policies are well suited for vacation properties in which people are moving in and out of throughout the year. Depending on the coverage, a standard homeowner’s policy may protect the property when guests are living in the home, but upon moving out and leaving the property unoccupied, coverage changes drastically. Unoccupied property coverage must be in place or the property may not be covered in the event of vandalism or other damaging actions.
Understanding the Insurance Policy Language
Mistaking or misunderstanding the wording in a vacant or unoccupied insurance policy is not uncommon. Property owners and investors should always read through their policy so these terms can be verified within the context. A vacant policy should not reference an unoccupied state. Insurers can rewrite certain areas of the policy, which only clarifies the coverage even further. When a claim is up for evaluation, the terms are simple and straightforward. When the insured is sure of the coverage they have, they can quickly claim their funds to fix and improve the property as necessary.
The Legal Importance for Insurers and Insured
Understanding the differences in coverage between these two policies and ensuring the correct coverage is in place will expedite any 
claims process in the future. Understanding these differences can also save time and money for both the insured and insurer because it eases the possibility of legal proceedings due to miscommunication between parties. When everyone involved understands the meanings of vacant and unoccupied, property owners can make sure to verify their coverage before a claim is necessary.
It is not abnormal to be confused about some provisions in any legal contract. Don’t hesitate to contact a legal professional so that every item can be explained. Vacant and unoccupied home insurance policies are important to have, and as long as homeowners understand the inclusions and exclusions, they will know what is covered on their policy.
