Who needs unoccupied property insurance?

Posted: 16th Apr 2017

Your property may be unoccupied for periods of time.

In terms of your insurance cover that might not be an issue – but it may become one.

It’s worth reading on to be sure you’re clear as to the difference.

When does a property become unoccupied?

We know from experience that many landlords use the term unoccupied to describe any time when their property is without tenants. That might be anything from a day or two in situations where tenants are changing over, right up to several months if the property is being significantly renovated.

In terms of your insurance protection though, that time period is critically important.

A typical landlord buildings and contents policy (and a standard home insurance policy too for that matter) will only maintain its full protection of your property for a specified maximum number of consecutive days without someone in residence. There may be some variation here from one policy to another but typically that period ranges from 30-45 consecutive days.

In terms of insurance, your property may become formally unoccupied in the eyes of your insurer once it passes that specified number of days without tenants being in place.

What that means for you

Once your property becomes defined as being formally unoccupied by your policy, elements of the cover provided might typically change or cease.

That could leave you exposed in terms of the totality of your financial protection.

It happens because insurers broadly regard an unoccupied dwelling as being at higher risk of certain types of peril than those that are occupied. For example, it’s generally recognised that unoccupied properties are far more attractive to criminals, such as burglars, than those with people in them.

As a result of these increased risks, your insurer will limit the period of time they’ll maintain full cover on your house once its unoccupied. A standard policy’s cover will usually be sufficient to cope with a normal duration holiday and most tenant changeovers but it’s important to take steps to protect your interests if you look likely to exceed the specified number of days.

That action involves considering unoccupied property insurance.

Why properties become unoccupied

At Cover4LetProperty, we know that sometimes the question of empty versus unoccupied property status can cause a little confusion for some property owners.

To be clear, the reason your property is unoccupied doesn’t matter in terms of a typical buildings insurance policy. You will typically need to take action to protect your interests in cases such as:

  • the death of a relative means you’ve inherited an occupied property – whether it’s furnished or empty. You may also be legally responsible to protect the value of the property if you’re an executor of a will;
  • your new tenants have notified you at the last moment that they won’t be moving in;
  • you’re unable to let the property when planned due to over-running re-decoration or other works;
  • your tenants have notified you of their intention to take an extended overseas trip for business or pleasure purposes;
  • it’s proving difficult to find tenants – for whatever reason.

Unoccupied property cover

Specific policies are available to help maintain your protection in situations such as those above.

Unoccupied property insurance shouldn’t be regarded as just nice to have because any claim you make may be rejected due to the property concerned being unoccupied without appropriate insurance cover in place.

Note that unoccupied property insurance typically brings with it certain conditions relating to specific obligations the policyholder may need to comply with such as making regular, logged visits to the property for inspections etc.

It’s worth noting that in some cases, such as if your property is undergoing extensive renovation and building work, it may be advisable to consider specialist renovation insurance. We’d be only too happy to advise you on that and would welcome your call or email contact for a further discussion.