Vacant property insurance explained

Posted: 15th Jan 2016

Notting Hill colorful houses at Portobello, west London.When does property you own become vacant? Individual owners might have a wide range of opinions, depending largely upon the particular reason for the premises being temporarily unoccupied.

Insurers, on the other hand, are likely to have a rather more particular view and a closer definition of a property falling empty and vacant. Whereas many are entirely content to extend comprehensive cover during those times when a building is normally occupied from one day to the next, they are likely to restrict cover, or remove it altogether, once the property has been unoccupied for longer than a number of consecutive days – typically month or so.

There is no universal definition of this period of vacancy, which may vary quite markedly from one insurer to another.

As a rule of thumb, however, you might be facing the prospect of your property being inadequately insured, if at all, when it has been vacant for a month or more.

If such a vacancy is in the offing, you might want to contact the specialists here at Cover4LetProperty to arrange purpose designed vacant property insurance. We have also produced some useful resources: read our Guide to unoccupied property and check out our video entitled: Do I need a specialist unoccupied property insurance policy?

Why are insurers so wary of empty property?

There is one overriding reason for many insurers’ reluctance to cover an unoccupied property: the considerably increased risk which such premises face:

  • the British Security Industry Association (BSIA), for example, suggests that one in every two reported instances of fire in vacant commercial and industrial property is the likely result of arson;
  • a fire may also start accidentally, of course, as the result of combustible material catching fire and – going unnoticed – rapidly spreads;
  • even routine maintenance problems may develop into major disasters if there is no one on hand to raise the alarm and take the appropriate action; and
  • on top of all these risks and perils is the tendency for any obviously unoccupied property to attract all manner of unwelcome attention from vandals, squatters, thieves and other intruders.

How you can help

Vacant property insurance is designed to help protect your empty premises, but there are a number of measures you might also take to help prevent loss or damage.

With respect to the already mentioned risk of arson, for instance, the South Wales Fire and Rescue Service has published a guide stressing the importance of carrying out a fire risk assessment of the premises concerned. By the same rationale, you might want to consider a wider risk assessment of all threats and perils to the unoccupied property.

More specific precautions and safeguards might include some or all of the following – whether or not they are required as a condition of vacant property insurance:

  • ensuring that the building is well maintained and kept in a good state of repair before it is vacated;
  • arranging logged inspections on a regular basis – if necessary by contracting a specialist property management service;
  • lagging or otherwise protecting water pipes which may be vulnerable to freezing during cold weather – and bursting in the thaw;
  • considering shutting down all utilities – or at least informing the utility companies that the premises are going to be vacant for the duration;
  • requesting the help of neighbours in letting you know of anything suspicious or unusual going on;
  • creating every impression that residential property is in fact occupied – perhaps by asking the same neighbour to park their car in your driveway from time to time, turning on interior lighting with the help of timer switches, and making sure that any deliveries are promptly taken inside and kept out of sight;
  • indeed, if you anticipate that the property is going to be empty for some time, you might want to consider sealing up the letterbox completely;
  • ensuring that any garden is well kept and free of fallen debris and rubbish;
  • keep valuable items well out of sight – preferably removing them altogether from the property for safe keeping – but stop short of emptying the property of all furniture and possessions entirely, since this only serves to underline the fact that no one is living there;
  • as a matter of common sense, of course, you need to make sure that all outside doors and windows are securely locked and that any burglar alarm is properly set – if you are unable to afford the installation of such a system, even a “false box” might help to deter opportunistic intruders.

An empty property might act as a magnet for all manner of undesirable attention as well as posing a number of additional risks and perils. For that reason, purpose designed vacant property insurance is intended as a temporary, standalone and comprehensive alternative to your lapsed regular insurance cover.