Many people may think that unoccupied property insurance is of interest to landlords alone, but it is not just buy to let properties that may need this form of protection.
Owner-occupied property may also be at risk if left standing empty for extended periods and any existing home buildings and contents insurance may become invalid after 30-45 consecutive days. (The period varies among insurance policies and insurance providers, so you should check your existing insurance to find out what the cut-off point is for your particular policy).
Just as there are many reasons why a property may lie temporarily unoccupied, so there are many different forms of unoccupied property insurance from various insurance providers. Only by comparing those competing policies are you likely to find the cover that is appropriate for your particular needs and circumstances
Who needs unoccupied home insurance?
If you are a landlord, then you may wish to keep the times when your property has no tenants living in it and paying rent to you to an absolute minimum. These are so-called “voids”. There may be times, though, when they may be unavoidable and, in those circumstances, you may wish to ensure that your property is protected by the best unoccupied property insurance.
So, if you are wondering whether insurance companies insure empty properties, then the answer is “yes”. Therefore, if your property is standing empty for a period of typically around 30-45 consecutive days or more, then finding out more about your vacant property insurance options may be your next step.
A house standing empty and vacant maybe as the result of:
- the property being in probate;
- perhaps there is a divorce settlement pending;
- you may be on an extended business trip;
- you may have treated yourself to an extended holiday;
- building or refurbishing work may have overrun;
- you may be finding it difficult to find new tenants for your buy to let property.
These are all circumstances where unoccupied home insurance may typically be required.
What is the difference between vacant and unoccupied?
The terms vacant and unoccupied might mean different things even though they’re often used interchangeably in everyday situations – as might the related term empty. Those differences can be significant in terms of your insurance protection.
To explain, in everyday English you might use:
- vacant – indicating nobody is currently renting the property from you and that you are seeking to let it;
- unoccupied – to mean that no one is in occupation at a given time. That may apply to properties that are vacant or let (for example, your tenants are on holiday);
- empty – usually meaning that a property is unoccupied and perhaps also is vacant but unfurnished. It might also be used to indicate that a property is off the market and under refurbishment.
In common usage, none of these terms necessarily says anything about how long the status has been in effect – i.e. its duration. However, within property insurance, one of those terms has a specific connotation relating to the duration of the status and therefore the specific cover required.
Whatever the reason, if your property has no one living in it for a period of around 30 consecutive days or more then it may fall into the insurance category of “unoccupied” – in which case you may need to compare unoccupied property insurance to supplement your landlord cover or your home insurance.
While you may also see unoccupied property insurance referred to as empty buildings insurance or empty home insurance, it is not when a property is empty of furniture that this type of insurance may be required. It is the presence or otherwise of people living in the property that is important.
The reason for this is that an empty house (even if furnished) may be more at risk than when there are people living in it:
- if there is no one around, small problems may become more serious very quickly, resulting in more damage and potentially greater cost;
- thieves and vandals may target properties which are empty, with unkempt gardens and dark windows being the most obvious tell-tale signs.
So, what sort of things should you be looking for if you’re about to compare unoccupied property insurance?
The policy features and benefits of unoccupied house insurance policies will vary from insurance provider to insurance provider, so when getting insurance quotes make sure you understand whether:
- there are special terms and conditions in the cover. Some policies, for example, may require that the property be inspected regularly and have ongoing maintenance work carried out as required;
- it may be necessary to keep a log of inspection visits and any work carried out; and
- draining down water and heating systems (or keeping the property at a minimum temperature), particularly over the winter months, is included in the policy terms and conditions.
Empty properties under refurbishment
In some instances, you may find your property is likely to stand empty for extended periods arising as a result of significant building and refurbishment work.
Some insurance providers may differentiate between unoccupied and empty property status, offering specific cover for those properties undergoing major works over lengthy periods. That may be required because in some such instances, it might be impossible to fully secure it if external walls and windows have been removed, for instance.
If you are planning renovations for your home or buy to let property, then keeping an eye on your dates may make sense.
Building work may be subject to delays and you may wish to make sure that you understand exactly when you may need to consider unoccupied property insurance to protect your financial investment.
Unexpected periods of unoccupancy
The empty property definition will typically apply even in situations where it has arisen for reasons entirely beyond your control.
However unlikely it might seem, things such as flight delays/cancellations or sickness while overseas might also mean you will need empty property insurance if you pass the specified number of consecutive days without occupants.
If you are unexpectedly delayed and worry your property may drift into formal unoccupied status, you should contact your insurance provider immediately. They may be able to put unoccupied home insurance cover in place quickly.
Similarly, tenants who failed to notify you that they were away for extended periods might not be considered a justifiable reason for allowing your property to drift into unoccupied status. It might be advisable to ensure a notification clause is contained within your tenancy agreements.
Disguising your property’s status
You may find that empty buildings insurance may carry with it some specific terms and conditions. As we have already mentioned, for example, you might be required to keep a log of inspection visits to your property and a note of maintenance carried out.
You might also find that your empty property insurance requires you to take some largely common-sense steps to try to disguise, as far as possible, the fact that your property isn’t occupied.
These are rarely onerous conditions and might include such precautions as:
- putting lights on timers;
- making sure post is not left to accumulate where it is visible;
- keeping garden areas tidy by cutting grass and pulling weeds;
- asking builders to refrain from erecting work underway advertisement signs;
- avoiding putting notices up telling callers when you will be back;
- not giving specific addresses in situations when the property is vacant and being advertised.
Removing valuables
Whether you are a landlord or owner-occupier, your unoccupied property insurance might require you to remove and separately securely store any items that are particularly valuable.
Mortgage conditions
Finally, don’t overlook potential mortgage provider requirements, warns the Council of Mortgage Lenders (CML).
As a general rule, as part of the governing loan agreement, your mortgage provider will require you to make sure that you keep full appropriate insurance cover in place at all times.
If you allow your property to drift into unoccupied status without taking out the appropriate unoccupied home insurance cover, you might be in breach of your loan agreement contract.
As such, your use of empty property insurance might not be optional but rather mandatory.
The consequences of being in breach of your mortgage agreement can be severe – including being asked to repay any outstanding sums immediately. It is unlikely to be a risk worth taking.
Next steps
Your landlord or owner-occupier house insurance may provide you with the cover you need on a day-to-day basis. If your property is without tenants though, or your home is standing empty, you may wish to speak to your house insurance provider and/or compare unoccupied home insurance policies.
Insurance for unoccupied property may be slightly more expensive than standard buy to let insurance and it may be a temptation to try and make do without it. You may find though that any claim on a standard policy may be rejected if the property is found to have been empty at the time for a period of more than 30-45 consecutive days.
Finding and comparing unoccupied property insurance
Finding the best unoccupied property insurance may be made that bit easier if you allow us to help you to find the most appropriate cover for your particular situation.
We understand only too well that what may turn out to be the best unoccupied property insurance for someone else may not be the best for you and may help you compare the available policies to find the one which matches your circumstances and your pocket.
For further reading on this important topic, you might want to visit our Guide to Unoccupied Property.
