One of the most important assets an individual owns is their home. Yet, it is also one that many people take unnecessary risks with. A risk is considered when one does not have home insurance. In the long term, most people will buy home insurance. But, there are times when individuals don’t realize that they need to rely on temporary home insurance that may be even only for a month.
What Circumstances Require Temporary Home Insurance?
Away on Vacation
Some individuals just take a week’s vacation. Then many others like to escape the cold Canadian winters. These are the snowbirds, and they can be gone for six months of the year. They may just assume that because they have home insurance in place, all is well. This is usually not the case. Most insurance companies will have a vacancy clause written into their insurance policy. There can be a few problems with this.
- One is the policy owner has not taken the time to read their policy fully. So they are not aware of this.
- The other is they are aware but figure they won’t get caught being away, so they will just ignore it.
Usually, the inclusion in the policy doesn’t just apply to snowbirds. It can be applicable for an absence of four days or more.
- The consequences of any of these possibilities are;
- The insurance could cancel the policy
- If damage does occur it will not be covered
- There will be an increase in premiums
- If insurance is cancelled, it could be more difficult to get insurance
Many of the insurance companies will list a set of conditions that need to be followed for those that are going to be away for a period of time. In order to make sure that precautions are taken that would help to prevent a claim.
Temporary Home Insurance
Every insurance company is different. If they have been advised that you are going to be away, there may be a few ways they will handle this.
- They may just increase the premiums for the period of time the house is vacant. Being as their risks are increased.
- They may create a temporary home insurance policy.
One may think that being away from home for medical reasons would be a valid excuse for having to leave the house unattended. Which it is but insurance companies are not going to excuse the fact that the insured should have been aware of the clause in the policy about a house unattended.
This is very much a reality as one article in CBC clearly reiterates the consequences of this…. “But Grey Power denied Scotland’s insurance claim, citing a clause in the policy that Canadians who leave their homes unattended for more than four days in the winter are not eligible for coverage for water damage unless they appoint a responsible person to check the heat inside every day. Insurance experts agree the case is unfortunate, but the rules are as they are.”That’s an exclusion on every personalized property insurance policy I know,” said Ken Orr, owner of Orr & Associates Insurance Brokers, and a former president of the Insurance Brokers Association of Canada.” Source: cbc
The House is Being Sold
Once the deal on the house is closed, then the new buyers are now responsible for the insurance. But, a lot of people don’t move into their newly purchased home right away. So it is vacant for a period of time. In this case, the homeowners must notify the insurance company of this if it is going to be this way for more than thirty days. They may be required to get a vacancy permit to give them home insurance coverage.
The House is Under Renovation
Many homeowners take on various types of home renovations. When they do, they don’t give any thought as to how their home insurance company would view this. Yet, if they read their insurance policy, they will most likely discover there is a clause within it about this. This can be to your benefit.
It may be that you need to increase your coverage during the renovations. There is a greater risk of a mishap, and you want to be covered. However, this is going to come with an increase in premiums. But, it should be in the form of temporary insurance coverage. In many cases, this is only necessary for a month or so.
It is Rental Property That is Vacant
Another circumstance that can arise is for homeowners who rent out their property. Sometimes there can be a lapse in tenants. This can have a direct effect on the property insurance.
The 30 Day Vacancy Rule
The insured has an obligation of reporting the vacancy after a thirty day period. If they don’t the Insurance company has the right to deny coverage.
A Vacancy Permit
This is an optional coverage that many insurance companies offer. Most likely when you advise your Insurance company about the empty rental, they will suggest the vacancy permit. But beware, as the coverage may be limited during the vacancy.
Other Forms of Short-Term Home Insurance
Another form of short-term insurance is when you are involved in home sharing. There are insurance companies that have policies designed just for this. Sometimes this type of insurance is referred to as Airbnb insurance.
Some homeowners who are going to be away from home for a month or so are now opting to rent their home. They should check with their insurance company regarding this. This type of arrangement will most likely not be covered under their standard home insurance. They will want to look at what their Insurance company can offer for short-term rental home insurance.