I know this is boring topic, but it caught me completely off guard for my investment properties in Calgary, and it might be one of the most important articles you read.

As a real estate investor, you know that the "quiet" period between tenants can often the busiest. You may be cleaning up, painting, upgrading floors, and screening applicants or just waiting for the next tenant to move in. But there is a hidden deadline every investor needs to track: the 30-day vacancy mark (especially for properties in Calgary and Edmonton in Alberta). In the world of insurance, a property that sits empty for more than a month often changes in the eyes of your insurance company and could mean the difference to a successful investment or a disaster waiting to happen.

This exact situation happened to one of my clients as they were trying to rent a townhome in Calgary - it was on the market for a few months and one night a pipe burst and it wasn’t caught for 3 days - the fire department and police had to break down the door and turn off the water. The leak caused over $250,000 in damages to the unit and adjoining townhomes and they are now likely out of pocket for the entire expense.

What is a Vacant Insurance Rider?

A vacant insurance rider (often called a Vacancy Permit or Endorsement) is a specialized add-on to your existing landlord insurance policy. It officially notifies your insurer that the property is uninhabited and extends coverage to protect it during this high-risk period.

Standard landlord policies are designed for properties that are inhabited with "eyes on the ground", i.e. someone who will notice a leaking pipe or a flickering electrical outlet immediately. Once those eyes are gone, the vacant insurance steps in to bridge the gap.

The Critical Difference: Vacant vs. Unoccupied

Insurers distinguish between these two terms, and the difference can determine whether a claim is paid:

Unoccupied: The property is ready for someone to live in (furniture is present, utilities are on), but the resident is just away (e.g., a vacation).
Vacant: The property is empty of people and "personal property" (no furniture, no residents) and there is no clear intent for a specific person to return tomorrow. Rental turnovers (i.e. the time between tenants) almost always fall into the "Vacant" category.

Why the "30-Day Rule" Exists

Most standard insurance policies contain a Vacancy Exclusion clause. This clause states that if a property is vacant for more than 30 consecutive days, several key coverages are automatically suspended.

Why are insurers so strict about this? It comes down to risk escalation:

1. The "Small Leak" Problem

In an occupied home, a burst pipe is a wet floor. In a vacant home, a burst pipe is a two-week flood that causes structural rot and toxic mold before anyone even walks through the front door. This just happened to one of my clients in Calgary and resulted in over $250,000 in damages in their townhome. The fire department had to break down the door and it’s taken months to fix and they will likely be out of pocket for the damages.

2. Vandalism and Theft

Empty homes are "soft targets." Without the deterrent of daily activity, properties are at a much higher risk for:

Copper theft: Stripping pipes and wiring.
Vandalism: Broken windows or graffiti.
Squatters: Unauthorized occupants who can be legally difficult and expensive to remove.

This isn’t a big issue for condos is a concern for houses.

3. Fire Hazards

Arson is statistically more common in vacant buildings. Furthermore, without a tenant to smell smoke or hear an alarm, a small electrical fire that could have been handled by a fire extinguisher or turning off a breaker, often turns into a "total loss" event.

What Does the Vacancy Rider Actually Cover?

A Vacancy Permit usually reinstates the coverages that were "turned off" at the 30-day mark. However, it often comes with conditions:

Vandalism & Glass Breakage: Reinstates protection against "malicious acts."
Water Damage: Usually requires you to prove you maintained heat in the building or shut off the main water line.
Liability: Continues to protect you if someone (even a trespasser in some cases) is injured on the property.

Investor Tip: Many riders require a "proof of inspection" log. This means you or a property manager must physically enter the property every couple of days and document it to keep the rider valid.

How Much Does a Vacancy Rider Cost?

I needed a Vacant Condo Insurance policy for one of my Calgary properties. A 3 month policy in Calgary cost me $436 (so about $150/mo) and I was able to cancel it and be refunded the remaining balance once the tenant’s occupancy started - this was money well spent to make sure that I still had insurance coverage.

The Bottom Line

If your rental is going to be empty for more than 30 days for any reason, call your broker to make sure you have the right coverage. Paying a small premium for a vacancy rider is significantly cheaper than having a $250,000 claim denied because the property was "technically vacant." Insurance companies will find a way out of paying a claim every time if they can - trust me.

Kyle Dovigi
Real Estate Broker | CondoMillionaire.com
Anyone can become a Condo Millionaire - it all starts with one.