What is unoccupied property insurance?

Posted: 3rd Aug 2016

This is one of the questions we’re most frequently asked by landlords.

We recognise that it can appear complicated because nobody wants to think they’re paying for their property and contents insurance twice. Well, please be assured that’s not the case!

What is happening is that we or your insurance provider are trying to make sure that your property cover remains in place when circumstances change. As such, we’re obliged to bring to your attention an important aspect of landlord’s insurance for property and contents – that it might become invalid if your property stands unoccupied for more than a specified time period.

Standard property and contents policies

A standard policy of this type is written to cover your property on the basis that it’s occupied by tenants (or somebody else).

Some allowances are made for things such as tenant holidays, changeovers and redecorating but most policies will contain a stated maximum number of days that cover will continue for, while the property stands unoccupied. Typically that’s somewhere between 30 -45 consecutive days.

Should a property stand unoccupied for longer than that, the policy may well become invalid and you risk having claims rejected.

As a passing comment, it’s worth noting that such conditions typically also apply in the case of owner-occupier buildings and contents policies too.

The reason why

When your property is unoccupied, it is statistically likely to be at higher risk from things such as:

  • damage due to unnoticed/unrectified problems (e.g. leaks, fires, etc.);
  • burglary, vandalism and perhaps squatting.

True, some risks may reduce, such as liability claims from tenants but the overall net effect is that the shape of the insurance required to protect your interests will change if your property is unoccupied. That’s why at Cover4LetProperty we always advise property owners to discuss uninsured property insurance with us if they think their property may stand unoccupied for more than the specified number of days in their standard policy.

Unoccupied property policies are designed for property owners who have a house or flat without occupants. Incidentally, that might not just be landlords. For example, the same considerations would apply if you had inherited a property as part of an estate and were in the process of trying to sell it or are working away from home for several months.

The risks

Quite often, potential unoccupied property insurance policyholders ask “is it worth it?”

It’s a fair question but one that could be asked for any insurance. Neither we nor anyone else can say for certain whether your specific property would suffer problems resulting in a claim, while it was standing formally ‘unoccupied’. All we can do is to highlight the fact that should such a situation come to pass, your claim may be rejected if you do not have an appropriate form of cover in place.

For example, for many years the police have given specific advice to help prevent burglaries when properties are unoccupied. That’s because they know such properties are a preferred target for burglars and so does the insurance industry.

Empty properties

As a final observation, do please take note that this cover applies to unoccupied properties and not just those that have been left unfurnished.

We have sometimes heard erroneous suggestions to the effect “my property is furnished, so it counts as occupied” and that could be a costly error. In fact, your property is considered to be ‘unoccupied’ after the specified number of days has passed, even if it is still fully furnished.

There are also a number of other myths relating to presumed exceptions to the unoccupied property conditions in a typical policy. They too, could be equally damaging and to avoid putting your cover at risk. It may be a good idea to review our guide to unoccupied property here.