Vacant buildings present special concerns for property owners. In addition to the pesky bottom line issues, vacant buildings can be attractive to teenagers looking for places to party, or to vagrants looking for somewhere to get out of the elements. Vacant properties are attractive to many people who are up to mischief because of all things, the property is vacant!
The current economic climate coupled with the recent growth of commercial/industrial Properties has fueled the increasing number of vacant buildings. Vacant buildings can leave property owners vulnerable to many disasters for which they may not have the proper insurance.
Many owners assume their normal commercial insurance will provide coverage, but nothing could be farther from the truth. Standard insurance companies and their policies are typically designed for buildings that are occupied but either severely limit or deny coverage altogether when a building becomes vacant. The standard insurance market wants no part of vacant properties because of too much exposure to loss.
Just because standard carriers won’t offer insurance, or continue existing contracts, doesn’t mean insurance isn’t available on these risks. A basic vacant policy (which is what most insureds require), covers fire, vandalism and provides extended coverage for wind and hail. However, basic policies will not cover theft unless added by endorsement and additional premium. Theft? “The building is vacant, what can they steal?”, you might ask. Anything in your building that contains metal is a target for theft. Appliances, lights, AC units, furnaces, coils, and easiest of all, copper wiring all have bulls eyes on them.
Vacant buildings can also be subject to frozen pipes which when thawed can result in substantial (and uninsured) water damage to the building. Extra coverage can be added to insure against this added exposure.
Not all vacant properties are the same. Having a local agent with the experience and knowledge to insure your property properly is critical in the overall underwriting process. Insureds must understand and expect reduced coverage and higher rates if the property is not occupied. Agents who maintain a level of professionalism and credibility with their underwriters will be in a better position to negotiate coverages and premium credits on your behalf.
If your property is vacant, contact your agent and ask for a review of your existing insurance. Don’t wait until something happens to determine if the proper coverage is in place.
Mike Reid can be reached @ 775/772-4601 or by email @ flytyer5@charter.net.
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