I made a mistake—or rather, did what was technically the right thing to do, and yet was still basically a mistake.
Our homeowner insurance on the old house came due, and it occurred to me that I should call them and tell them we didn’t have any STUFF in there anymore to insure: coverage for personal property is a big part of the policy, so I was imagining a nice little savings. Instead, the insurance company said they could no longer insure the old house, because it was (1) vacant and (2) not our primary dwelling, and that they don’t even offer such policies. I said wait, wait: we were going to be listing it for sale any day now, this was just a normal move, we weren’t planning to keep it vacant—and he said no, that didn’t matter. He was nice about it, but decisive.
He put me through to a partner company that does insure such properties. At this point I was still expecting a savings. I also thought that since it was a partner company, all the information on the old house would transfer. An hour later, after attempting to remember things like when did we replace the roof and what was the finished square footage, I had a new policy that cost 2.5 times what our old policy cost. TWO POINT FIVE TIMES. I was dismayed. I asked for clarification. She said it’s because vacant houses are actually the MOST expensive kind of property to insure, because no one is there to watch over them.
I ventured that I thought I had probably made a mistake by calling: that if our policy hadn’t coincidentally come due, I would never have known we were SUPPOSED to have a vacant-house policy, and we would have just sold the house and canceled the old regular policy without ever knowing. She was very nice but just as decisive as the other guy: she said she totally understood the feeling, but that actually if something had happened to the house while it was waiting to be sold, we would not have been covered under our old policy. That is: YES, we could have gambled on nothing happening, and that’s what most people do when they move (probably because many of them, like us, don’t even know they’re doing that), but that we would have been coasting on no actual homeowner insurance, while still paying for homeowner insurance and thinking we were covered.
Well. And we’ll get a prorated amount of this new expensive policy refunded to us when we do sell the house (less a non-refundable $250 portion). And now if it burns down, or if a potential buyer gets hurt while viewing the house, we’re covered. And it wasn’t much extra to add vandalism coverage, so now I can stop worrying about someone breaking in and spray-painting or whatever. But the odds of anything going wrong were so small, I wish I’d stayed ignorant and just paid the insurance bill.
Yeah. That’s definitely a thing; my dad went through it. They worry about everything from frozen pipes, to squirrels chewing the wiring, to people breaking in and taking copper pipes. These could all happen when you still have your furniture in there, but they figure if you lived there you’d be able to call for help and mitigate it, maybe.
Very sorry that you discovered a hidden cost. I hope you can unload this property SOON. It’s the albatross-iest.
Oh yikes! I never would have known that either. That really stinks – as if moving isn’t expensive enough. I do sometimes wish I just could play dumb about things that end up sucking, but it is probably better to be safe than sorry. I too hope that you unload that property soon!
Well this is very good information to know. I hate this kind of thing. Where there’s some Important Information that people in a given situation need to know, and yet… they don’t even know to ask about it. I mean — perhaps I am feeling a little on the strident side today as it is — but HOW DOES ONE UNCOVER THIS KIND OF STUFF? It’s totally hidden information. And you don’t even know to LOOK for it. I mean, are you supposed to go around asking, “Is there anything that I SHOULD know but might not?”… who would you even say that to? All people you encounter during X Process? ARGH! There should be a manual!
Pant, pant.
I am very sorry that you have to pay MORE (and SO MUCH more), and am hopeful the house sells quickly and you can get your prorated refund in short order.
Ugh, insurance. Why does it so often feel like nothing more than a really clever scam?
So annoying. All insurance is so terrible anyway, as the late great Tom Petty said, take back your insurance! Baby, nothing is guaranteed! One thing I will say is that I found I was paying like FOUR times as much for homeowners insurance than a lot of my friends, as I had asked on Facebook about it. A casual mom friend of mine emailed me to say that she and her husband had started their own insurance agency and I got with them and I saved a LOT of money by having the same car insurance and house insurance. So maybe you can check with an insurance agent about bundling? Good luck!
When I was growing up, some neighbors were selling their house, and while it was in probate, the buyers were working in the yard and burning some yard waste and burned the house down. The neighbor had no insurance and no recourse – and until now I just thought that was a huge, terrifying risk of owning a house. It’s nice to know otherwise, though I’m sorry I found out via you having to pay so much money!
The BUYERS burned the house down? This is terrifying indeed! And I have to say, I had no idea there was a different kind of homeowners insurance for an unoccupied home. I, too, would have been frustrated to pay more but I also would have gone through endless worst-case scenarios in my head if I had this knowledge but kept the old insurance – because think of it this way…the old insurance was actually USELESS insurance. You were literally paying for coverage that wouldn’t cover the house if anything happened (Polar Vortex! Frozen pipes!). So you’re not really paying more…you’re paying for the *right* insurance.
Ugh. I hate these “Shot to the pocketbook” vs “Piece of mind” type of things! Had your insurance not been due this month, you wouldn’t have even known. It has left me wondering why your agent didn’t address this when you added a 2nd house to your insurance policy (surely they cross-reference!?). Or did you insure with a different company? Adding a 2nd house would seem to be a red flag in their database, leading to them asking what the plan was – will you rent it out? (that also would have increased your insurance!), or are you selling it? I feel like they dropped a ball.
We had a similar type of thing happen when we added our son (who had just passed his drivers license exam) to our car insurance… we got a little wrist slap for not having added him to the insurance when he received his drivers permit 7.5 months earlier. Ummm, how were we to know we were supposed to add him!? The Drivers License Center employees didn’t mention it in the full hour we sat there after he had passed his permit test (this is apparently related to background checks on newly permitted drivers for the REAL IDs we will all be required to have). We are still left confused about whether this is state law (which could vary by state), or our insurance company’s rule. No one we talked to was ever required to pay additional amounts for their children with driver’s permits. As we have another child approaching age 16 (PA’s age in which you are allowed to test for your permit), we’ll be figuring it out soon.
Nothing is ever easy!
Wait, what?! Can it really be the case that some states don’t require named additional driver coverage for learner drivers?!! Here in the U.K. it’s just an accepted headache that learner drivers (and young drivers up until at least 21 and more like 25) are horribly expensive to insure and absolutely must have insurance at all times. It’s not unusual for the annual premium for new drivers to be £1500-2000.
I don’t know about the timeframe in which they are learning. But just to confirm on the point about new/young drivers being very expensive to insure – YES INDEED! Our insurance doubled when we went from 2 adult/experienced drivers with little history of insurance claims to that plus a teen driver. And we’ll be adding another driver later this year… (not something I thought about when having two kids 16 months apart!).
Arizona doesn’t require insurance on drivers with just a permit. I have a child with a permit and made sure that we didn’t need it with our insurance company.
Now I’m definitely going to call next year when my oldest gets his learner permit!
You did good. If something happened and you still had the old policy, they might have denied your claim. And that could be very expensive.
Ooh yes, this. We didn’t know about the “vacant” insurance either. Our house was empty for three months until we rented it and fortunately nothing happened (we found out after we moved out and found renters). We did find to our pleasure that it cost less (quite a bit) to insure it as a “landlord” though because we only had to cover the house and not any contents (that was on the renter).
This all makes logical sense now that I’ve thought about it, i.e. how the policies would be different and why, but oh man how frustrating! Especially since you thought a) it was a non-issue and b) that you’d be saving money! GAH. I hope the house sells super fast so that you don’t end up paying any more than you would have for a lived-in house.
Count me in the group of Never Would Have Occurred To Mes. It does make sense, I suppose, and yeah yeah better than that awful house burned down in probate story (!!!!!!!!!!!) but MAN that’s irritating and I agree with everyone else, HOW WOULD ONE KNOW THEY WERE SUPPOSED TO DO THIS??
This happened to us too!! I was so stunned when he told me how much it was going to be. (Also, ours was not empty intentionally…we just struggled to sell it, so what a kick in the head.)
Insurance is the worst. Unless you need it, then it’s great. But generally it’s the worst.
I don’t know if this is helpful or what (probably too late), but a few years ago my parents bought a house halfway across the country from where they were living, near my sister, where they planned to retire in a few years. They had a similar problem getting insurance coverage, so they ended up “renting” the space (for like a dollar a month or something) to a writer friend of my sister’s who needed an office away from his house. Of course they had to pay utilities but the savings in s insurance, apparently, was enormous. I guess if you’re hoping to sell soon this isn’t helpful but who knows, maybe someone else reading comments will find this useful!
I feel like a dodged a huge bullet. We were having trouble selling our house and left it insured incorrectly for about a year, including oddly enough a moment when I needed to make an insurance claim which was paid for without any pushing. I guess I am pleased that no one ever mentioned it to me, but am also a little concerned now (more than 2 years later) that I will have some cosmic retribution, because that is how I am.
I had the same thought as Tracy: why wouldn’t the insurer for the new house asked about the old house? If it’s a new company, I’d think they might try to pick up some business for the old place. Or it occurs to me that if it’s with the same company, they very well might NOT want to mention it to you hoping that you forget to cancel it if it’s been sold OR that you’ll keep paying for a policy they’ll never need to honour. hmmph. A little cynical, perhaps.
I once had the opposite occur – got a surprise reduction in my auto insurance when I called to inform them that I was now using the car to commute (I used to walk to work.) It seems to me that it can’t be because of the new extra use but maybe a coincidence that I had recently turned 40 and got some kinda age discount?
Hmmm … so, do you happen to know this: if you own a house, and buy another house, and the first house is financed as your primary residence but then the second house becomes your primary residence, and the mortgage on the first house was taken out at a fixed, excellent rate for a long time, do you have to refinance (or, heaven forbid) pay off the first house, or can you just — keep on, keeping on?
We own a reasonable and entirely adequate house and I am occasionally tempted to move (locally) but maybe keep and rent the old (now current) house. But then I think, would I lose the 3.25% 30-year fixed mortgage that I so love? A (very small, as largely hypothetical) quandary!
Speaking from experience. If you rent your house, it doesn’t affect your mortgage at all. We did that…moved halfway across the country, rented out our old house and got to keep our excellent rate. And we were pleasantly surprised because we still got a good rate on our new mortgage for our new house. The only thing it might affect is your taxes, when and if you sell the rental.
Woohoo! Thank you, good to know.
But note it will change your insurance if you make it a rental. Our rates doubled. And you have to pay income tax on the rent, which I did not expect AT ALL since I’m basically handing it over to my mortgage company.
I would have had no idea that the house was no longer covered! It is good you did call. But I get wishing you didn’t know. When we bought our house, it still had knob and tube wiring, which is very hard to cover because it’s an incredibly dangerous firetrap. But we had a policy, and then we dared to use the policy for a roof thing so they dropped us. And then we got another policy, which was easier than I expected because of the wiring. And then we were doing work or something, I forget, and I made some calls, and it turned out the insurance we had DID NOT COVER OUR HOME. I spoke to someone at the bank, and she said something about the inspector not seeing any knob and tube when he came to do the inspection when we switched policies. “We never had an inspection,” I said, confused. There was a tense pause, and the agent said, “Let me call you back.”
So! We weren’t covered! Because of a fraudulent inspector who said he came and checked it out but had not! And we weren’t IN on it; we had no idea there was supposed to be an inspection. (That seems obvious now, and I think we were pretty naive, but still. Innocent.)
We ended up replacing all the knob and tube which was expensive, but I’m very glad we did because of the whole “firetrap” issue, but sometimes I wonder what would have happened if our house had burned down while we had a policy that did not cover knob and tube. I somehow do not think the insurance company would have said, “Oh, that’s OK, that was our fault for believing the fraudulent inspector, so we’ll still pay you.” I think, instead, we would have been homeless.
Anyway. I don’t like that your insurance costs more, but I feel reassured that you are actually going to be covered.
Oh, let me tell you, the insurance company would look for EVERY reason not to pay even if you weren’t aware of the fraudulent inspector. My BIL’s parents just had to fight the insurance company with a lawyer because of storm damage from Hurricane Florence. They were not flooded, they had no water near them, but they had a tree fall on their house, through the roof, and knock down a wall. Due to the amount of rain that then came into the house, half their house had to be rebuilt. EXCEPT….the insurance company said they now were in a floodplain, which they had never been before in almost 50 years of owning the house, so if they wanted any insurance money to rebuild (which obviously they did), they would first have to raise their single story house up on piers (which costs a LOT). The lawyer eventually got them grandfathered in to not have to raise their house, but they still had to spend $$ on a lawyer (cheaper than raising a house, but still).