Rental vacancy rates in the Phoenix area are at an all-time high.  Landlords are often stuck with empty properties for months, increasing the risk of vandalism and increasing the risk of loosing their insurance: [Thanks L!]

Liz and Jerry Dawson expect their three Valley rental homes to be vacant at times, but they were unprepared to be hit by vandals, something that is becoming more common for empty rentals.

The Ash Fork couple were even more surprised when their insurance company refused to pay the damage claim because their north Phoenix home had been vacant for more than 60 days.

"You just feel betrayed," Jerry Dawson said of the insurance company’s
 denial of their claim.

Liz Dawson said she hopes that other landlords realize their insurance risk if their properties have been vacant.

Accidental landlords- longtime home sellers who gave up and decided to rent out the property instead, aren’t always aware of insurance rules for rentals. It can be a bit of a shock to find out how much more it is than a typical homeowner’s policy.  Policies for vacant properties are even worse.

Jim Gontjes, Foremost Insurance Co. regional product manager, said policies typically limit coverage for properties that are vacant for 30 or 60 days. Some companies will continue coverage with a permitted-vacancy clause, but that requires what can be a substantial increase in the premium, he said.

"Work with your agent so they’re aware of the situation . . . and can find other options for coverage," Gontjes said.

This year, his company, based in Grand Rapids, Mich., has written coverage for more than 2,100 vacant properties in Arizona through September. That is an increase of 161 percent from a year ago, Gontjes said.

Increased premiums, increased risk of vandalism, lower rents and a smaller chance of keeping the property occupied.  It’s a tough time to be a landlord- especially if you don’t read your insurance policy.