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.

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 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.

1. 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.
2. 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.
3. 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.
4. 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.
5. 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.

Claims Scenario #1

The 76-year old insured pulled forward out of her driveway to make a left turn into the path of a motorcycle approaching from her left, which was coming out of a curve.  The operator of the motorcycle applied his brakes and "laid it down" but struck the quarter panel of the insured's vehicle. The insured was cited for traffic violations.

The motorcycle passenger (wife of the motorcycle operator), died at the scene.  She is survived by her husband, four children (ages 7 to 15), her parents, grandparents and several siblings. 

The motorcycle operator suffered a fractured finger and abrasions and had a valid "bystander's claim" under state law.  The RLI Personal Umbrella policy contributed $640,000 in addition to the primary policies.

Claims Scenario #2

Shortly after sunset, Mrs. Insured was driving her minivan on a 2 lane roadway near an intersection when she hit a bicycle driven by a 14 year old girl (Girl #1) who suddenly crossed in front of her.  The accident occurred on the roadway adjacent to a park where football and soccer practice had just let out. 

There were six witnesses to the accident, including the girl's best friend (Girl #2) who was riding with her.  Had they ridden to the next intersection, they could have crossed with a light and crosswalk, but because they were in a hurry, they decided to cross where they did. 

Witnesses saw both girls initially start across the road, but then Girl #2 stopped.   Girl #1 kept going and was struck.  Girl #2 would not say why she stopped, but did say that she did not think Girl #1 looked before she crossed the road.

All witnesses agree that the insured van was traveling well within the 45 mph speed limit, and the insured maintains that she was going approximately 35 mph.  The witnesses also agree that the insured did not apply her brakes or take any evasive action nor did Girl #1 look both ways before crossing the road. 

With the exception of one witness who is a close friend of Girl #1's family, the remaining four witnesses are consistent in their testimony that the insured probably did not have time to avoid the accident. 

The insured driver is now 70 years old and had initially given a statement.  She later provided a doctor's note stating that forcing her to testify about the incident would be detrimental to her health and cause severe emotional distress.  Her initial statement confirms that she never saw Girl #1 until she hit her.  Girl #1 was hit by the van on the front passenger side corner, indicating that she was almost all the way across the lane when she was hit. 

Girl #1 was not wearing a helmet and was thrown onto the hood, hit the windshield and was launched into the air, landing in a ditch where she was found unconscious.  She suffered a brain stem injury, head fracture, brain hemorrhage, & multiple compound fractures of the right leg.  She remained in the hospital for 90 days.  She was released with weakness of all four limbs and was in minimally responsive states, requiring maximum assistance with all activities of daily living.  She remains on a feeding tube and school records show that she attends a special education program.

The defense position was that the insured's failure to act was reasonable in that she had no time to see and react to the sudden movement of the bicyclist. A suit was filed and the final decision was that the insured should have had time to observe the plaintiff, Girl #1, and take evasive action.  The claim was ultimately closed with RLI paying $681,000.