Have you ever wondered what happens to the insurance on a condo or a home after it has been foreclosed upon? Does the insurance policy expire if the bank owns the property? Vacant properties and the insurance coverage on them is a growing problem in many areas where more and more homes are becoming vacant and remaining vacant for long periods of time.
Most homeowners policies will only cover a property if it has only been vacant for less than 60 days. This means that after two months or so, many damages are no longer covered. This may apply to damages that result not only from vandalism, but also water damage, any broken glass, theft, and even attempted theft. There are other policies that will only pay a portion of the amount for a property that is vacant. We have many online degree programs that help us in gaining knowledge on the insurance and vacant properties.
This is a big problem for many condominium owners and the associations. In many areas there are condominium complxes where the majority of the units have become empty. In many cases an insurance company will deem the complex vacant even when the whole condominium complex is not. They will consider a 31% vacancy to be completely vacant in terms of insurance coverage, and reduce the insurance payout amounts. This may leave a homeowner in a situation where they can’t cover the cost of repairs.
Since this is becoming such an issue in many areas, there are now some insurance companies who are selling policies to specifically cover vacant properties. These are policies that will not distinguish between a property that is vacant and a property that is not. The coverage would be the same no matter what.
It is important for condo associations and also the owners of the individual units to check their policies. Look at the fine print to find out of you are covered if your property becomes vacant and if so, how long will the coverage last.