Do I Need Property Insurance for Vacant Land?
Even if the land you own has no existing structures or buildings, it’s wise to have it covered in case of third-party bodily injuries and property damage or if an accident occurs on it. Sometimes referred to as vacant lot insurance, you are still responsible for what happens on that land as the property owner.
Do I Need Vacant Rental Property Insurance?
Suppose you are a VRBO or Airbnb host who owns a second or seasonal dwelling that you rent. There will be times when the residence is vacant if you don’t have any bookings and you don’t reside there yourself. In that case, it’s critical that you inform your licensed broker of the vacancy. In addition, it is advisable to add vacant property coverage to your Airbnb or VRBO insurance policy to ensure your dwelling is adequately insured.
Will a Landlord Insurance Policy Cover a Vacant Property?
If you are a landlord of a commercial property or a residential building used for student housing, your landlord insurance policy or student rental housing insurance will not cover a vacant property. Therefore, you are left with an insurance gap when a tenant moves out of your commercial space or dwelling, and the premises is vacant for more than a prescribed number of days as defined in your policy. In other words, you may need to add vacant property coverage to your overall policy to be fully protected.
However, if a tenant breaks the lease unexpectedly and vacates the premises (if, for example, your tenant goes out of business and the company ceases to exist), your landlord policy may cover the rental income you lose while you pursue your former tenant for losses in court.
What Kind of Risks Do Vacant Properties Face?
Whatever the reason is that your commercial property is vacant – you could be selling the property, searching for a new tenant, or temporarily closed due to a public health mandate – the potential for something to go wrong still exists. Those risks may include:
- A fire igniting
- A water pipe bursts or leaks and causes damage
- Vandalism or a break-in
- Severe weather damage caused by lightning, wind, or hail
- Squatters could inhabit the premises without you knowing
10 Tips for Protecting a Vacant Commercial Property
There are several actions you should take to protect your vacant commercial property to reduce the likelihood of damages and to have to file a claim, including:
1. If your commercial space is unoccupied for a lengthy period, shut off the water to the space.
2. Install a security 24/7 monitoring system for the interior of the unit and have exterior surveillance cameras installed to monitor the perimeter of the building.
3. In the wintertime, hire a snow removal contractor to clear the property’s driveway, sidewalk, and the entrance of snow and ice. During the warmer months, hire a landscaping company to cut the lawn, trim shrubs and trees, and pick up any garbage that’s strewn on the property.
4. Check on the property yourself every 48 hours to ensure there is no vandalism, signs of a break-in, or interior damages, and collect any mail that arrives at the property.
5. Put a ‘beware of dog’ sign in the front window.
6. Keep the blinds or curtains closed but leave a light on inside the unit to appear as though someone may be inside.
7. Hire a private security company to help monitor the property.
8. Hire a local construction contractor to erect temporary fencing around the property.
9. Test and ensure your fire detection system is in working order.
10. Notify your insurance broker to inform them the property is vacant.
You want to find a new tenant for your vacant property as soon as possible. So, get active advertising your space is available to rent. Some of the ways to do that include:
- Use free online listings for advertising your property, such as LoopNet, CBRE, and Kijiji, and include high-quality images and a detailed description of what the space offers to small business owners.
- Put up ‘for rent or lease’ signs in the building’s windows and use word of mouth with former tenants, friends and family, and your local business improvement association or chamber of commerce.
- Place ads in your local and regional newspapers.
- Consider working with a professional property management company to help you find a new tenant.
In the meantime, protect your commercial building with a vacant property insurance policy. Fill out an online application to get a free quote, and our licensed brokers will do the shopping for you from our network of more than 50 Canadian carriers to find the policy and price that suits you best.