When it comes to Commercial Property Insurance, insurance companies have put exclusions in place when it comes to vacant properties. Right now we might not see a lot of vacant buildings in Austin, TX, because the economy is doing well, but when the market starts to change, it's not uncommon to see vacant buildings. How an insurance company responds to a loss or claim at a vacant structure could make or break a company, so hopefully this information will help some business owners.
The question I get at times is, what does it matter if it's vacant or not? Simply put, your property is more susceptible to losses the longer it's vacant. Studies have shown that vandalism and theft claims increase when the property is vacant. This is the primary reason insurance companies put this clause on the policy.
Insurance companies understand that businesses go out of business or move and will be vacant at times. However, there is a limit on how long they will provide coverage. In most, cases there is a 30 day or 60 day vacancy clause, which means, if the property has been vacant for more than 30 or 60 days, some causes of loss, like, vandalism and theft, might not be covered. That is why it's extremely important to read your policy to understand what kind of vacancy clause is on your policy.
If you have a property that is going to be vacant for an extended period of time due to renovations, being sold, etc., there are insurance policies that will cover the property. If you need help obtaining one of these policies or would like for me to review your policy with you, please feel free to contact me.