What is unoccupied property insurance?
For once, here is an insurance product which does exactly what it says on the tin – unoccupied property insurance is cover for property you own which is temporarily empty and vacant.
Why might I need it?
- your need for specialist unoccupied property insurance may be similarly simple and straight forward;
- a careful examination of your existing home insurance or landlord’s insurance on your buy to let property is almost certain to contain a clause warning you that cover may become restricted or lapse altogether once your property has become unoccupied for a give number of consecutive days – the exact number of days may vary from one insurer to another, but is typically set at between 30 and 60 consecutive days;
- if the cover on which you are relying whilst the building is in continuous occupation lapses when it becomes empty, you are still likely to want continued insurance cover for the building and its contents – and that is the purpose of unoccupied property insurance;
- as a condition of your existing mortgage or buy to let property, you will be obliged to have at the very minimum and at all times adequate buildings insurance cover, to cover both you and your mortgage providers’ financial interest in the property;
- in any situation where the cover for something as valuable as your property is concerned, you might want to contact your insurer to discuss – and perhaps arrange – specialist unoccupied property insurance to ensure that comprehensive cover remains in place.
Why has my property become unoccupied?
There are any number of reasons why your home or buy to let accommodation may be temporarily unoccupied:
- your job might require your working away from home – possibly even abroad – for several months;
- you might be taking an extended holiday;
- the property might be subject to probate, pending a decision on its final disposal;
- you might have arranged extensive refurbishment or remodelling during which time the property remains uninhabitable either for you or for tenants; or
- if it is let property, previous tenants may have moved out and you are awaiting the arrival of their successors.
Why is my current insurer reluctant to continue cover?
Insurance is all about risk – and the simple fact is that an empty and unoccupied property is exposed to greater risks than one which is in continuous occupation:
- an empty property inevitably attracts the unwanted attentions of squatters, vandals, thieves and others;
- whether they are set by intruders such as these or result from electrical faults or incidents, the property is likely to be considerably more vulnerable to the risk of fire; and
- otherwise simple and routine maintenance problems may develop into major incidents if there is no one on hand in the property to take immediate action.
These are just some of the reasons why your current, standard insurer may decide to allow cover to lapse or to severely restrict the protection offered.
What does unoccupied property insurance cover?
- the purpose of unoccupied property insurance is to restore to the empty building and its contents as comprehensive a level of protection as you enjoyed when the property was in continuous occupation;
- in other words, the structure and fabric of the building and the risk of loss or damage to its contents may once again be covered;
- even though the property may be unoccupied, for instance, as the property owner or landlord you may still be held liable if a member of the public or visitor to the premises suffers an injury or has their property damaged;
- an important element of unoccupied property insurance, therefore, is to maintain your indemnity against such claims – which risk assuming very considerable proportions – typically with a cover of at least £1 million.
What if there is a change of circumstances?
- you might need to stay away from home longer than you intended or building works might be overrunning their original schedule – how may cover be maintained?
- unoccupied property insurance is typically sufficiently flexible to take any such changes completely in its stride;
- if circumstances change, therefore, it may be a simple question of extending the period of cover for as long as may be necessary by talking to your insurer.