How to Change Homeowner Insurance From Owner-Occupied to Non-Owner Occupied

An unoccupied house is a red flag for some insurers.
i David De Lossy/Digital Vision/Getty Images

If you move out of your home but keep the property, it's going to cost you. Once a home becomes non-owner-occupied, it costs more to insure. Whether you're renting the house out, using it as a vacation home or waiting until you can sell, you may end up paying several hundred dollars more a year for homeowners insurance.

Why It Matters

Even though you're not at home 24/7, insurers still feel safer knowing you live in the house. If, say, it stands vacant for six months while you travel overseas, nobody's there to spot a sudden roof leak and call the roofer or contact a plumber about frozen pipes. If you rent out the house, it's occupied, but the renter has much less at stake than you do. She may not work as hard to keep things in good shape.

Making the Switch

The change itself is pretty simple. Call your insurance agent, explain the situation and the company will figure out your new premiums. Then you either pay them or start looking for a new insurer, depending on the quoted price. Some homeowners try to duck the issue by not telling the company, but that's a mistake. If you have to file a claim later, your insurer can deny the claim if it discovers you fudged the facts.

Potential Pitfalls

The worst-case scenario is that your insurer decides to cancel your policy. In the 21st century, some New York State insurers argued that once the home is no longer occupied, that's a "physical change" that justifies immediate cancellation under state insurance rules. The state's insurance department decided that no, leaving a home temporarily vacant wasn't legal grounds for killing the policy. If the owner abandons the home permanently, however, the insurer would be justified.

Hanging On

Your insurer may have a different definition of "non-owner-occupied" than you do. There are cases where insurers have claimed a stay in a nursing home or hospital puts the home in the "non-" class. An Ohio insurer once argued a home wasn't owner-occupied because the owner only stayed overnight now and then, letting his family use it the rest of the time. A court disagreed. if your insurer wants you to pay more because it thinks you're not an occupant, you may have to sue to settle things.

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