The Vacant Expert

The Difference Between Vacant and Unoccupied Dwellings

The words “vacant” and “unoccupied” are often used synonymously, but when it comes to insurance coverage, they do not mean the same thing. So what’s the difference between the two?

A property is considered “vacant” when there is no personal property within the home, such as furniture or kitchenware – items that would be necessary for someone to stay in the home. A property is considered “unoccupied” when the home is furnished, but there is no one currently staying there.

When looking for the proper insurance coverage for your property, knowing the difference between vacant and unoccupied is important! You need to be able to accurately describe your property to ensure that you are adequately covered by your insurance policy. Vacant homes are often harder to insure than homes that are simply unoccupied. Fortunately, we provide coverage for vacant dwellings that offers solid protection for your property!

The Impact of Short-Term Rentals on New York City

According to a monthly report from Douglis Elliman, a real estate company, the number of short-term rentals listed on Airbnb in New York City greatly outnumbers the number of available long-term rentals. Specifically, there are around 7,669 apartments available in Manhattan, Brooklyn, and Queens, but there are 19,464 Airbnbs listed in Manhattan, Brooklyn, and Queens.

Its popularity as a tourist destination makes New York City the perfect candidate for this short-term rental phenomenon. It’s interesting to note that the short-term rental industry in New York City took a hit during the pandemic, and yet this issue still exists.

Airbnb has denied its potential negative impact on the long-term rental industry, believing that their platform actually makes it more affordable for renters to live in the city through the extra income they can obtain through renting. New York City, on the other hand, has previously tried to correct this issue in 2011 by making short-term rentals in multi-unit buildings illegal. A quick search on Airbnb reveals that some renters haven’t been deterred by this law.

Despite some of the drawbacks, short-term rentals can actually have a positive economic impact on a city through the extra tax revenue that they provide. Having a thriving tourism industry can bring in extra cash, especially when the visitors go out and spend their money at local stores and restaurants. And as previously mentioned, the ability to host a short-term rental can help the renter afford to live in their city through the extra income it provides.


How to Protect a Vacant Property

Properties can be vacant for a variety of reasons. The property could be for sale, it could be an investment property or part of an estate, or it could be under renovations. When a home is left vacant, it is more susceptible to damages, whether from vandalism or weather-related hazards. It is important that vacant property owners take steps to protect their property from these issues.

Here are some of the steps that can be taken to keep a property safe while vacant:

Get an Alarm

An alarm system to call 9-1-1 in the event of an intrusion is a great way to ensure your property is protected when you aren’t living there.

Install a Security Camera

Visible security cameras are often a deterrent to thieves, and they can be used to help identify the thief if something is stolen.

Talk to Your Neighbors

Neighbors can be helpful if they are able to keep an eye out for any suspicious activity happening on or around your property. Let your neighbors know that your property will be vacant and ask them to inform you if they see anything that looks fishy.

Maintain the House and Yard

Regular maintenance should be performed on the property to spot issues before they turn into bigger problems (this includes pipe leaks, checking smoke detectors, and damage caused by weather). It’s also important to keep up with things such as the lawn and garden. An overgrown lawn is a tell-tale sign that no one is living at the property.

Take Measures to Prevent Fires

The exterior of the home should be free of any debris that can catch fire, such as paper, cardboard, and any combustible chemicals. Fires in a vacant building are much more likely to spread to the entire building and adjacent properties.

Drain the Plumbing

Be sure that the plumbing is drained before leaving a building vacant. In colder weather, leave the heat on to avoid a burst pipe.

Turn On the Lights

Use motion-activated security lights to protect the property, and have a timer turn on a few interior lights to give the impression that someone is home.


The Basics of Vacant Property Insurance

Properties left unoccupied or vacant for an extended period of time are typically not covered by homeowners insurance. This puts you and your investment at risk. Luckily, some companies offer specialty insurance policies that will help put your mind at ease. Here's what you need to know about vacant property insurance. 

How do I know if my property is "vacant"?

When homeowners leave a property alone for an extended period of time, the risk of something happening without you knowing goes up. In fact, some homeowners policies do not apply if your property is unoccupied for more than 30 days at a time. Be sure to look at your insurance because every policy is unique! 

What does vacant property insurance cover?

Vacant property insurance can cover all kinds of properties with specific coverages varying among providers. Maybe you just bought a new house but won't move in for another few weeks. Maybe you own a vacation home but only have time to visit once a year. Or maybe your job keeps you on the road for long periods of time. Specialty property insurance provides coverage for cases like this, and more!

Why you need specialty property insurance

Fire, vandalism, and general liability are all bigger risks for vacant properties than occupied homes. As a result, it is extremely important you consider replacing your homeowners policy with specialty insurance. No matter what, take steps today to ensure your property is fully covered!

Where can I find the insurance I need?

While many insurance providers offer vacant property policies, you need to make sure you find a company that suits your needs. For example, some insurers offer discounts if you take certain steps to protect your vacant property. Installing an alarm is one such option, though make sure you discuss this with your insurer beforehand. 

Plan To Tax Vacant Properties

In cities across North America, local politicians are considering imposing a tax on unoccupied or vacant properties. The main stated reasons behind such policies are usually the implied effect of increasing the housing supply as owners of vacant properties choose to sell their assets and the ability to raise additional tax revenue for reinvestment in other efforts. 

Nevertheless, critics say that such policies will have a relatively minimal impact on the overall housing supply and are not worth the trouble. Instead, they suggest that cities consider addressing some of the issues causing properties to remain vacant. 

Do vacant property taxes work?

Because the taxes created on vacant properties have been, by and large, recently implemented, there is a lack of data as to whether it achieves the stated goals that caused them to be considered in the first place. However, evidence from Vancouver, Canada, suggests that it did reduce the number of vacant properties and increase the overall housing supply, though not by too much. 

The main issue with vacant property taxes is the uncertainty regarding how many properties qualify and the challenges of gathering this data. As a result, many property owners are left wondering whether their secondary homes will be the target of such policies. This is leading many to begin creating lobby groups and research efforts to divert the attention of politicians.

What alternatives could we consider? 

Many suggest that governments of all levels should instead be considering efforts to increase the housing supply by creating construction and development incentives for affordable properties. Additionally, there is reason to suggest that vacant property taxes disproportionately target specific groups – like individuals with secondary, part-year vacation homes – rather than addressing the root causes of housing inaccessibility. 

Indeed, to address the former most cities have adjusted their proposed legislation to make exemptions for owners who legitimately care for their vacant properties and, thus, are not the proper targets for taxation. For example, proposed taxes could be linked to the presence (or absence) of a specialized vacant dwelling insurance policy, with credits for property owners who protect their assets appropriately. 

Vacant Properties In Baltimore 2022

At the end of January 2022, Baltimore mayor Brandon M. Scott compelled all City agencies to conduct a comprehensive, internal review of how they handle vacant properties. The announcement came after a vacant house collapsed during a fire, resulting in the tragic deaths of three firefighters with another severely injured. It marked the acceleration of ongoing efforts by the mayor to address the issue.

About one-third of vacant buildings in Baltimore are currently being transformed, whether due to private owner-funded renovations or as part of a larger redevelopment plan. Additionally, the Department of Housing and Community Development has made efforts to acquire vacant properties for conversion or demolition. Nevertheless, vacant properties remain a big problem due to their tendency to attract crime and stifle housing values in the area. 

In early March, Mayor Scott announced plans to use $100 million of Baltimore’s American Rescue Plan (ARP) funds on a housing initiative that includes a strategy to deal with vacant housing. It is the largest allocation of the ARP money so far, which speaks to the mayor’s emphasis on this issue. As he mentioned, the plan “builds on [their] efforts to increase housing stability by focusing on protecting Baltimore homeowners and renters, preserving housing gains and preventing blight, and supporting projects that are primed to create pathways to equity and neighborhood transformation.” 

While the plan has been relatively well-received, some skeptics point to past failures to address the vacant property problem in Baltimore. For starters, new buildings are abandoned at a pace that matches or exceeds the rate at which vacant properties are transformed. Furthermore, while Mayor Scott promises that the efforts will be “holistic” and address the root causes of building abandonment, there are concerns as to whether it is sufficiently nuanced.

Other mayors will be closely monitoring the success of Baltimore’s program, so if you own a property that is currently vacant, you should do the same. Whether the building is unused due to renovation, for sale or rent, or any other reason, it is a good idea to check with your city regarding local regulations. Additionally, make sure you have a vacant property insurance package to cover your building, as generally, homeowner insurance rarely covers such assets. 

States With The Highest Vacancy Rates In 2022

Vacant properties are ones that have no tenants or contents. In the real estate and insurance industries, these are considered “void.” It is important to note that this does not mean these are all abandoned locations, they’re just not currently in use. Property can be vacant because it is being sold, rented, in negotiations, or even just as a vacation home that hasn’t been developed. Understanding how your state compares to others in its vacancy rate is important when considering investments, as housing prices are related to the number of vacant properties in a region.

Top 5 States with the Highest Vacancy Rates:

  1. Vermont – 22.86%
  2. Maine – 22.68%
  3. Alaska – 20.51%
  4. West Virginia – 18.12%
  5. Alabama – 17.69%

Top 5 States with the Lowest Vacancy Rates:

  1. Oregon – 7.76%
  2. Washington – 7.87%
  3. Connecticut – 8.09%
  4. New Jersey – 8.45%
  5. California – 8.68%

Because there are many reasons why a house or apartment is left vacant, it is hard to find broad patterns that drive vacancy rates. Typically, states with high vacancy rates have lower average property prices. However, it is important to note that this is not always the case – for example, Alaska has high vacancy rates and above-average median home values. 

If you have a property that is not currently in use, it is important to have a conversation with your insurance agent as soon as possible. Generally, homeowners insurance rarely covers real estate that is vacant for 30 to 60 days or more, and you may need a specialty insurance policy to make sure you are fully protected.