If your home is uninhabited or rented, insurance coverage changes

In many neighborhoods, "for sale" signs rival the number of telephone poles, and some of those signs are looking weather-beaten. Even owners of oceanfront properties are having trouble finding buyers, at least at a price that will cover the mortgage.

One way around this problem is to stay put until the economy turns around and the housing market recovers.

But if you've lost your job and need to move to find employment, that's not an option. Even if you're lucky enough to find a buyer, closing the deal could take weeks or even months.

In the interim, it's not enough to ask your next-door neighbor to keep on eye on your property until the new owners move in.

You should also contact your insurance agent, or the company that provides your homeowners insurance.

Standard homeowners policies are designed to cover homes that are occupied. If you leave your home uninhabited for a month or longer, your policy may not cover damage or losses, says Michael McRaith, director of the Illinois Department of Insurance.

You could also expose yourself to lawsuits, McRaith says. If a child gets hurt while playing on your property, your insurance may not protect you from liability, he says.

The amount of time you can leave your home unoccupied before it affects your coverage varies, depending on your insurer.

Fire claims

Some insurance policies exclude coverage for fire-related damage if the property has been vacant or unoccupied for 30 days, says Richard McGrath, chief executive of McGrath Insurance Group in Sturbridge, Mass. For others, it's 60 days, he says.

Other types of claims may also be excluded if your home has been left unattended.

For example, State Farm's homeowners policy won't cover damage caused by vandalism after a home has been vacant for 30 days, spokesman Dick Luedke says.

Damage caused by frozen pipes may also be excluded if the home was vacant when the pipes burst, he says.

Once you notify your insurer that you're leaving, a couple of things could happen:

• Your insurer will adjust your policy to one that covers vacant properties. If you know how long your home will be vacant, you may be able to buy a policy that will cover that period of time.

You'll pay a higher premium for vacancy coverage, but without it, you could be on the hook for the cost of repairing or replacing your home.

• You'll have to get a new policy. Some insurers won't cover vacant homes. In that case, you'll need to find a company that will.

Some insurers specialize in covering higher-risk properties, such as vacant homes, says Jeanne Salvatore, spokeswoman for the Insurance Information Institute, an industry-funded education organization.

An independent insurance agent can help you search for policies that will fit your circumstances.

If you manage to rent your home, you'll be able to cover at least some of the cost of the mortgage. But here, too, you'll probably have to pay more for homeowners insurance.

Insurers consider a rented home a higher risk than one that's occupied by its owners because renters have less interest in caring for a property.

"When you're a homeowner, your care and upkeep is probably going to be a lot better," McGrath says.

If you rent your home, you're going to need a landlord policy, Salvatore says.

Premiums for these policies are higher than premiums for owner-occupied homes. But the policy will reimburse you for lost rental income if the house burns down or becomes otherwise uninhabitable, Salvatore says.

Liability coverage

A landlord policy will also increase your liability coverage, protecting you in the event that your tenant sues you, Salvatore says.

A landlord policy won't cover your tenant's possessions if they're stolen or damaged in a house fire or other disaster, Salvatore says. If your tenant wants that kind of protection, he'll need to buy a renters insurance policy.

Renters insurance is relatively inexpensive — premiums average $150 to around $200 a year, depending on the state where the rental property is located.

Renters insurance also provides liability coverage in the event that one of your tenant's houseguests falls and sues him for negligence.