It may be cheaper -- and safer -- to keep a home for sale occupied, especially if it doesn't sell soon enough.

With swelling inventories of vacant homes on the market, more and more home sellers are learning the hard way -- your homeowner's insurance policy can expire if the home is vacant for more than 30 days.

The nation's supply of empty homes rose to a record 18.6 million in the first quarter 2008, according to the U.S. Census Bureau.

The vacancy rate, the share of unoccupied homes for sale, also hit a record of 2.3 million, up nearly 3 percent from a year ago.

Some of that higher vacancy rate is due to the estimated more than 1 million foreclosed and repossessed homes on the market right now, according to the Mortgage Brokers Association. Other vacant homes have been abandoned by those yet to reach foreclosure, but who are no longer able to make the payment.

Insurers put a higher risk (and cost) on insuring vacant homes for the same reasons some owners are discovering -- theft, vandalism, fires and water damage are more likely to happen in an empty home.

The damage is also likely to be worse because there's no one around to report it or stop it.

"You also have a liability problem because the word goes out, 'Nobody lives there. Let's go play in that yard'," said Tully Lehman spokesman for the Insurance Information Network of California.

Vandalism and theft brings an unsavory element and, well, there goes the neighborhood and the values of surrounding properties.

Lehman says before your home is vacant, take a look at your policy and talk with your insurance agent for guidance.

He also said vacant homeowners insurance is available to cover the property and liability. Coverage varies from state to state and policies vary from company to company and the policies can be costly.

The typical policy has a 24-month term for vacant homes for sale or not, homes in the name of an estate, or homes under renovation.

Comparison shop several insurers. You could get the best deal from your current insurer. You can raise the deductible to lower costs. Coverage may also be available through some state-run insurance plans, such as Fair Access to Insurance Requirements (FAIR) Plan.

But you also have some options to help you avoid the cost of vacant home insurance.

• Find a savvy real estate agent who has a proven track record of moving homes in a slow market, including the current slow market.

• Don't move out until you've sold the home. If you are one of a couple, consider staying behind, or living there occasionally until the home is sold.

• Rent out the home. Not only will the home be lived in, the rent will help cover your carrying costs. You may still have to change your homeowners insurance policy to reflect the property's new rental status -- say to reduce your contents coverage -- but it'll be cheaper than vacant home insurance. Otherwise, hire a house-sitter or let someone you trust live there until it's sold.

• Make the home look lived in. No matter what you do, you still have to keep the home maintained by cleaning the yard and gutters, trimming trees, clearing the gutters, checking for leaks, shoveling the sidewalks and driveway, and winterizing or summer-izing as necessary.

• You also have to protect your property. Install and keep operable a monitored home security system and make sure the smoke detectors have fresh batteries. If your home has a sprinkler system, monitored central alarm for fire, smoke and theft and deadbolt locks, your home is safer and the features can lower the premium on your existing homeowner's insurance policy.

• Give the lived-in look some redundancy. Have an acquaintance bring in mail (Security experts say to stop mail and other deliveries when you are away). Ask a neighbor to park their car in the driveway. Install timers on lights and leave window coverings and some furniture in the home.

• Don't commit fraud. If leave your home vacant longer than your current policy permits before expiring due to vacancy, you could save a bundle. However, if the place is damaged or destroyed while vacant, after the policy should have expired due to vacancy, the insurer can challenge the claim.

Published: June 26, 2008

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A journalist for 35-years, Broderick Perkins parlayed an old-school daily newspaper career into a digital news service offering editorial content and consulting services. Perkins' San Jose, CA-based DeadlineNews Group includes the flagship news site, DeadlineNews.Com, offering real estate, personal finance and consumer journalism, and a backshop, the Deadline Newsroom.