If you are preparing to sell your home, what’s one of the more forgotten necessities before doing so? Insurance.

If you intend to sell your home from afar (meaning your home is vacant), you may need to consider the fine print in your homeowner’s insurance agreement. In many instances (most), a standard policy will not cover you if you are not living in your home.  Insurance matters.

Take Josh Stech, director of the Sundae Real Estate website, for example; he advises that if your house is vacant, your homeowner’s insurance policy could cancel or deny any claim you might have. “Be aware of the details in your policy since these may vary between insurers.”  For argument’s sake, let’s say that your home insurance company will cancel your policy if you no longer live in the home you have listed for sale.

When Selling, What Are Good Homeowner’s Insurance Questions:

• What exactly does the insurance for your home protect you from when selling it?
• What type of policy should you get, and will it matter to the insurer whether your house is in use or unoccupied?

According to Bill Samuel of Blue Ladder Development in Chicago, home insurance policies for vacant houses tend to be 120 percent more expensive than standard policies due to statistically higher claims against empty properties. As a result, Bill estimates that vacant homeowners typically end up paying an extra 120 percent in premiums.

Mr. Samuel explains, “Once construction is completed and we’re in the process of finding an applicant,” we use a vacant home insurance policy. After they move into the property, we convert the policy to one for landlords, which is much more cost-effective.”

What Does Home Insurance Cover When Selling a House?

When selling your home, you typically dispose of some personal possessions inside, such as kitchen appliances and furniture. Your homeowner’s insurance policy will provide protection if you live at the property.

Tracy Cousineau, co-founder of Real Estate Expert Advisors – an Atlanta real estate agency – states that all policies cover your home’s structures, appliances, and fixtures. Moreover, homeowners’ coverage also protects possessions if someone slips on your property; liability coverage protects any lawsuits for injury sustained from slips.

What Type of Insurance Do You Need When Selling a Home?

According to experts such as Jeffrey James, an insurance agent from Tampa, Florida, homeowner’s insurance is required when you purchase the house. Still, different types of coverage will be necessary when selling it in the future. Your current homeowner’s insurance may already cover any potential issues that arise during a home sale.

Coverage for Contents and Dwelling

This coverage protects both your home and belongings in case an agent of a real estate agency accidentally sets off a flame within your fireplace to create ambiance but then causes smoke damage within the residence – in such cases, homeowner’s insurance could cover these damages.

Liability insurance

This coverage pays the costs if any member of your household is responsible for bodily injury or property caused to another person, such as by dogs that bite or a slip and fall. If potential buyers are injured while on your premises, and you’re found at fault, your liability insurance kicks in; for minor injuries caused by others that you were responsible for, medical coverage that’s included in a homeowner’s policy will take care of any medical bills resulting from those incidents.

Does It Matter If Your Home Is Occupied or Vacant?

If you sell your home while still residing there, your existing insurance should suffice. On the contrary, if you have already removed yourself (moved or turned it into a second home previously) from the residence and are selling it empty, separate insurance for vacant homes is more often than not required.

Jamie Safier, a real estate agent with Douglas Elliman in New York City, explains that standard insurance policies cannot cover certain items for houses not occupied, such as vandalism, arson, incendiary fires, and thefts. These could be added to an existing policy or purchased separately as individual policies.

There are several scenarios in which vacant house insurance could be beneficial:

• If it’s not your primary residence, it could serve as a vacation or short-term housing solution if you plan to be away for an extended period.
• When traveling for lengthy stays (more than 4 weeks), or if you have bought the house but won’t need it until one month has elapsed since purchase.

Safier recommends that homeowners look into a vacant home insurance plan if they plan to be away for more than 30 days. Certain states, like Arizona, require homes not to be classified as “vacant” until empty for 60 days.

If your insurance company protects a vacant home when damage occurs, they could charge an individual deductible that applies specifically to that home. PURE, for instance, has a 5 percent “vacant property deductible.” If the house remains empty for more than 30 days before damages occur, your 5% deductible kicks in; so for a home insured for $400,000 with this rate, you would receive back $20,000.

What Types of Insurance Cover Vacant Homes

If you plan to sell the home you’re moving out of, contact your insurance broker immediately. Not all properties can provide insurance for vacant houses.

Jason Christiansen, the co-founder of Young Alfred, an insurance website, states that when protecting an unoccupied home for sale, the insurance provider or agent wants to make sure it appears well maintained and as if someone lives there even though no one actually does. That includes having furniture inside; empty houses without furnishings could be abandoned.”

Homes that are neglected or improperly maintained put homeowners at a higher risk of having issues and claims. This puts insurance companies under unnecessary strain, increasing the chance that things won’t go as planned.