WHAT MAKES IT A HOME?
by: Aaron Whitaker
You bought a house, and moved out of the old one but it hasn’t sold yet. If you go back to the old house almost every day, would it still be considered owner occupied by the insurance company? The answer is likely to be yes if the named insured is not currently living in the home. Dwelling Fire policies for homes can often be twice the cost of a home policy. Let’s take a look at a few reasons why you would need to move the home onto a Dwelling Fire policy and when you would need to do so.
When do I need a Dwelling Fire policy, and why?
A home insurance policy is designed to provide insurance on a home that is owner occupied. If you no longer live in the home or live in the home less than 6-7 months out of the year (# of months depends on the insurance company, if partial occupancy is allowed at all), and do not rent the home out to others when not occupied by the named insured, your home may no longer be eligible for a home policy.
If the home is rented to others, a dwelling fire policy could be a good option. Some insurance carriers will allow rental of the home for a few months out of the year. Keep in mind that insurance carriers often will not accept daily/weekly short term rental use. If they do allow rental of the home at all, it would based on a contract between you and the renter per month or longer, so long as the home is still owner occupied most of the year.
It might seem tempting to just leave a home that no longer meets the eligibility requirements of the insurance company for a home policy on its current policy even though you have moved out. Doing so could actually violate your home policy contract, with your insurance company, and if you are found to have violated your insurance contract the insurance carrier can actually deny claims in the event of a loss that would have been covered otherwise. You wouldn’t want to have the house burn down and have your insurance carrier deny the claim just because you were trying to save a few bucks.
There are several different kinds of Dwelling Fire policies. I’m only touching on two common types of Dwelling Fire policies today. The first is commonly called a “landlord” policy. As you can guess, it is for homes that are rented out to others. The second is commonly called a “vacant” policy. This is used for any dwellings that are not currently being occupied.
Occupancy is often disputed by insureds but, at the end of the day, it is how the insurance company defines occupancy that matters. Usually occupancy at least starts with someone actually sleeping in the home regularly, and actually using it as a home. Just because you go over there everyday to check up on the home does not mean that the home is occupied.
Vacant policies are often more expensive than landlord policies due to the increase risk exposure e.g. if a fire starts in a vacant home, the fire department won’t likely be called unless the neighbors notice, and by that time the home could be a much more significant loss than if the home had been occupied and the fire department notified earlier.
It is important to review your policies with your local agent when there are any significant changes in your life. As you can see above, occupancy can require an entirely different policy than you may currently have. Be sure to review all of your policies regularly, and don’t hesitate to contact your agent for help.
@WLAinsurance www.WhitakerLaChance.com (269) 324-7700
About the author:
Aaron Whitaker joined Whitaker-LaChance in 2014 as a Personal Insurance Customer Service Representative. He brought with him extensive customer service experience from working in a retail professional camera store and computer electronic store for three years in Chicago. Aaron manages all personal insurance placement, marketing, account service and claim management. His expertise is in working with our clients to make sure their insurance program takes care of them through all the changes in life. Aaron is a graduate of Kalamazoo Home School Association and attended Columbia College in Chicago, where he studied Graphic Art Design. He is an avid photographer and enjoys fishing.