The news is filled with stories about the unfortunate reality of vacant properties. As just one example, office property in Phoenix Arizona now stands at a 26% vacancy rate and the news regularly features stories on homes and commercial properties that have been stripped and damaged by squatters, theives and vandals. We have also seen the devastating results of this kind of damage first hand as clients with vacant luxury homes and Class A offices have had their property stripped right down to the copper wires in the walls, pool equipment and even garage door opening systems! Homes and businesses alike are standing empty. Many owners may who purchased homeowners/dwelling or business insurance policies while the homes or businesses were occupied have incorrectly assumed they are still secure with that coverage in place now that the property is vacant. WHY ISN'T IT COVERED? Vacant or unoccupied property presents special challenges. The premium charged for occupied property does not take into consideration the increased exposure of vacant and/or unoccupied property. The insurance provided by most policies is limited, and may not respond at all if the property has been vacant for more than 60 consecutive days (prior to a loss)! Many if not most insurance companies will cancel coverage immediately if they become aware of the vacancy. Even if the policy is not canceled there may be major problems in the event of a loss. The occupancy status is considered essential (material) to the insurance company. When the use and/or occupancy of a property changes many insurance companies no longer want to insure the property. WHAT THIS MEANS If you have vacant commercial property and your coverage is cancelled you would be personally labile for the following: - Accidents and Injuries on the property; -Catastrophic loss from flood or fire; -Vandalism and Theft including broken glass; -There is no coverage for freezing of a plumbing, heating, air conditioning, or automatic fire protection sprinkler system or of a household appliance caused by freezing if a structure has insufficient heat, and/or the water system has not been shut off and drained; - On a commercial building if there is 31% or less occupancy in addition to the above, ALL claims are reduced by 15%; -Depending on the policy and insurance company involved the entire policy may be void in the event of a vacancy.