Occupancy Explained (With Examples) | Insurance Definitions

Описание: Learn the definition of occupancy in insurance, with examples of different types of occupancy.

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The insurance definition of occupancy is simple: who lives at a given address?
Despite its simplicity, occupancy is one of the most important pieces of information in a home insurance application. That’s because different forms of occupancy represent different levels of risk for the insurance provider, and different prices for the policyholder.

In fact, occupancy is so important that a policy may be void if the occupancy is incorrect.

When you apply for home insurance, give the correct occupancy, and inform your insurance provider if that situation changes.

But what exactly constitutes a change in occupancy?

For one thing, it’s only permanent changes that your insurance provider cares about; going away for vacation isn’t a change in occupancy. Neither is having your teenage kids move away for school. Occupancy is about more foundational changes, like a family moving out of an apartment to bring in renters.

Each insurance provider might define occupancy categories differently, but generally there is the owner-occupied home, or primary residence at the top. That’s the standard, least-risky form. Homeowners tend to take pretty good care of their homes, after all. Then you’ve got a primary residence with tenants, a rental home (either short- or long-term rentals). There are also vacation or second homes, which aren’t primary homes but also don’t have tenants. Homes under construction or renovation are usually a category as well. And finally, we’ve got vacant homes; those are homes from which everyone as moved out and there are no plans to return.

Note that a vacant home is not the same as an unoccupied home. Vacant means everyone’s gone with no plans for residents to return. Unoccupied means empty but with residents that plan to return (like a family on vacation).

If a home is vacant without the insurance provider’s knowledge, coverage is void after 30 days (with most providers).

It’s very important to inform your provider right away if your home’s occupancy changes.

00:00 Intro
00:13 Occupancy definition
00:48 Types of occupancy
03:09 Vacant vs. unoccupied