Selling a home is a whirlwind of activity. You are decluttering closets, repainting walls in neutral tones, and obsessing over curb appeal. Amidst the chaos of open houses and negotiations, you might decide to move out early to stage the property perfectly. It makes sense from a sales perspective—empty or professionally staged homes often sell faster and for higher prices.
However, moving out before you sell triggers a hidden countdown clock within your homeowners insurance policy.
Most homeowners are unaware that their standard policy is built on the assumption that the property is occupied. When you move out, you fundamentally change the risk profile of the home. If you don’t navigate this transition correctly, you could find yourself facing a coverage cancellation or a denied claim right when you can afford it least.
Here is everything you need to know about the intersection of home staging, vacancy, and insurance risk—and how to keep your investment protected until the closing papers are signed.
Understanding Home Insurance Policies
To understand why staging can be a problem, you first need to understand how insurers view your property. A standard HO-3 homeowners policy provides coverage for a residence where you, the owner, live.
The premiums you pay are calculated based on the idea that someone is home regularly. When you are home, you notice if a pipe bursts. You notice if a window is broken. You deter burglars simply by being there.
The “Vacancy” and “Unoccupancy” Clauses
Buried in the fine print of nearly every homeowners policy are clauses regarding “vacancy” and “unoccupancy.” These are not just industry jargon; they are specific legal definitions that determine whether you get paid after a disaster.
- Unoccupied: This generally means the home contains your personal property (furniture, clothes), but you aren’t physically present. Think of this like an extended vacation. You are gone, but you plan to return, and the house is still functional.
- Vacant: This is the danger zone for sellers. A home is typically considered vacant when you have removed the majority of your personal property and no one is living there. If you move your furniture to your new house and leave the old one empty (or lightly staged) to sell, it is vacant.
The Ticking Clock
Insurance policies usually have a time limit on how long a home can be unoccupied or vacant before coverage is restricted or canceled. According to the Insurance Information Institute (III), this window is typically 30 to 60 consecutive days.
Once that window closes, if you haven’t notified your insurer, your policy may automatically void coverage for specific perils like vandalism, glass breakage, and water damage. In some cases, the policy effectively ceases to exist.
Staging a Home for Sale: The Risk Factor
Staging is the art of preparing a home to appeal to the widest range of buyers. It often involves a “less is more” approach. You remove personal photos, clear off countertops, and often remove bulky furniture to make rooms feel larger.
In many scenarios, the seller moves out completely. They might hire a professional staging company to bring in rented furniture, art, and accessories to create an aspirational look.
The Conflict: Staging vs. Insurance
Here lies the conflict: To an insurer, a “staged” home is often a “vacant” home.
Even if the house looks beautiful and furnished to a buyer, the insurance underwriter sees a property that no longer houses the policyholder. The furniture inside often belongs to a third-party staging company, not the homeowner.
From an actuary’s perspective, an empty or staged home is a magnet for trouble.
- Vandalism and Theft: Without residents, a home is an easy target. If copper pipes are stolen or windows are smashed, there is no one there to stop it or report it immediately.
- Undetected Damage: If a pipe freezes and bursts in the winter, or a dishwasher line leaks, the water could run for weeks before anyone notices. What might have been a $2,000 mop-up job becomes a $60,000 gut renovation.
- Liability Increases: When you are selling, strangers are walking through your home constantly. Delivery people, real estate agents, inspectors, and prospective buyers are all traversing your property. If someone slips on a rug or trips on a stair, the liability risk is significant.
Real-Life Examples of Coverage Gaps
The consequences of ignoring these clauses are not hypothetical. They happen to well-meaning sellers every day.
Consider a scenario highlighted by the Insurance Information Institute involving a homeowner who inherited a property. They cleared it out to sell it but left it on the market during the winter. It sat unoccupied for over 60 days. During a freeze, a pipe burst. Because no one was checking the home, the water ran for days, destroying floors and electrical systems. The damage was estimated at over $60,000. The claim was denied because the vacancy clause had been triggered.
Another common issue arises with theft. Standard policies often have specific exclusions for theft if the property has been vacant for more than 30 days. If you have moved out, and a week later someone breaks in and steals the staging furniture or built-in appliances, you might assume you are covered. However, if you didn’t update your policy, you could be paying out of pocket.
How to Prevent Cancellation
The goal is to sell your house, not lose your coverage. You can stage your home effectively without exposing yourself to financial ruin, but it requires proactive management.
1. Read Your Policy Immediately
Do not wait until the moving truck arrives. Pull out your policy document and search for “Vacancy” or “Unoccupancy.” Look for the specific number of days allowed (usually 30 or 60). Note that in some states, like Texas, regulations specifically dictate notice periods for non-renewal due to vacancy, but you cannot rely on state minimums to save you from a denied claim.
2. The “Material Change” Rule
Most policies require you to notify the insurer of any “material change in risk.” Moving out is a material change. If you fail to tell them, they can argue that you withheld information, potentially voiding the policy from the date you moved out.
3. Maintain the Property
If the home is empty, you must demonstrate due diligence.
- Heat and Utilities: Keep the thermostat set to at least 55°F (13°C) to prevent freezing pipes.
- Water: If possible, shut off the main water supply and drain the pipes. If you need water on for showings, ensure the heat is consistent.
- Security: Ensure all locks are functioning. Consider installing a basic security system or video doorbell that you can monitor remotely.
4. Document Everything
Keep a log of visits. If you or your real estate agent checks on the house, write down the date and time. If a claim arises, this log proves the property wasn’t completely abandoned.
Alternative Insurance Options
When you call your insurance agent to tell them you are moving out, they may tell you that your current policy cannot be renewed or will need to be canceled. Do not panic—this is normal. You simply need to switch to a different product.
Vacancy Permit or Endorsement
For shorter periods, your insurer might offer a “vacancy permit” or endorsement. This is an add-on to your existing policy that buys you coverage for a specific extra period. It will likely cost more, and it may exclude certain perils (like vandalism), but it keeps the core policy active.
Vacant Home Insurance
If your home will be on the market for months, you likely need a standalone Vacant Home Policy. These are specialized policies designed for the specific risks of empty properties.
- Pros: They cover the specific risks standard policies exclude.
- Cons: They are significantly more expensive (often 50% to 100% higher than standard premiums) because the risk is higher.
Builder’s Risk Insurance
If you are moving out so that significant renovations can be done before the sale, a Builder’s Risk policy might be the appropriate choice. This covers the structure and materials during construction.
Expert Advice: Managing the Staging Inventory
Who insures the furniture? This is a critical question often overlooked.
If you hire a professional stager, do not assume your home insurance covers their furniture. Shell Brodnax, CEO of the Real Estate Staging Association (RESA), advises homeowners to be very careful here. “It doesn’t make good business sense to use your insurance policy for damages when you did not cause the damage,” Brodnax notes. “One solid claim on your policy and your insurance rates will increase—or you might be dropped altogether.”
The solution:
- Check the Stager’s Insurance: Ensure your staging company carries their own commercial liability and property insurance. Ask for a certificate of insurance (COI).
- Contract Clarity: Your contract with the stager should specify that they are responsible for their inventory.
- Beneficiary Rider: In some cases, you can ask to be added as a beneficiary on the stager’s policy for the duration of the contract, though this is less common.
Communicating with Your Insurance Company
The single biggest mistake homeowners make is silence. They fear that if they tell their agent they have moved out, their insurance will be canceled.
While it is true that your standard policy might be canceled or non-renewed, hiding the truth is far worse. If you hide the vacancy and a fire burns the house down, the investigator will find out you weren’t living there. Your claim will be denied, and you will be left with a mortgage on a pile of ash.
What to say to your agent:
- “I am putting my house on the market.”
- “I plan to move out on [Date].”
- “The house will be professionally staged.”
- “What options do you have to cover the home during the sale period?”
Conclusion
Staging your home is a fantastic strategy to maximize your sale price, but it shouldn’t come at the cost of your financial security. The transition from “occupied family home” to “vacant product for sale” is a distinct shift in the eyes of insurance underwriters.
By understanding the difference between occupancy and vacancy, checking your policy’s time limits, and securing the right coverage endorsement, you can navigate this period safely. Don’t let a coverage gap turn your profitable home sale into a costly disaster. Pick up the phone, call your agent, and ensure your property is protected until the keys are in the new owner’s hands.