In today’s down economy, more and more homes, condominiums, and buildings are becoming vacant each day. Recently, many national news sources picked up a story out of Ft. Meyers, where one family was the sole resident of a 32-story condominium building. While the family undoubtedly enjoyed exclusive use of the pools and other amenities, this freedom was not without problems. The family reported that they often found themselves dealing with trespassers and vandals roaming the empty building.
While empty buildings, condos, apartments, and houses cause a myriad of issues, problems relating to insurance claims for damage are becoming more frequent. While many people believe that an insurance policy will still provide coverage for an empty property, the reality is that policies often do not.
Many insurance policies do not provide coverage for property that has been vacant for more than 60 consecutive days. While many provisions are usually kept in place even after the property becomes vacant, damages resulting from vandalism, sprinkler leakage, broken glass, water, theft, or attempted theft are often excluded. Further, some policies reduce payments for covered losses to vacant property, leaving the policyholder without enough money to make necessary repairs.
Vacancy exclusions can affect unit owners and associations alike. While it is unusual for entire condominium buildings to be vacant, many times, total vacancy is not required for the exclusion to apply. Many policies consider a building “vacant” if at least 31% of the property is not being used for its intended purpose. Therefore, even though a handful of tenants may actually reside in the building, the property may still be considered “vacant” for insurance purposes.
Given that many condominium associations are beginning to resemble the “ghost towns” of old westerns, many insurers are taking advantage of a growing need for coverage. Insurers, such as American Integrity Insurance Group, based in Florida, are writing specific policies for vacant properties. These policies do not make a distinction between occupied and vacant properties and will generally provide the same coverages in either situation.
With hurricane season in full swing, it is important that associations and unit owners check their policy for vacancy exclusions. If you are unsure whether your property meets the definition of vacancy, contact your agent or insurance company directly. If you have a property that is vacant, make sure to contact your agent and inquire about potential policies that will provide coverage. Doing so now will save you a lot of headaches later.
