What does vacant property insurance cover?

Posted: 11th Jun 2015

Vacant property attracts more than its fair share of risks and perils:

  • with no one on the premises, otherwise routine maintenance issues may go unnoticed and create a major crisis;
  • there is a greater risk of a fire taking hold and potentially gutting the whole building;
  • security is a bigger issue as the threat of theft puts at risk not only contents of the property but even valuable materials used in its construction;
  • an empty property has a tendency to act as a magnet for vandals; and
  • the absence of any other occupant may attract the unwelcome attentions of squatters.

As these and other risks assume greater and greater proportions the longer the premises remain unoccupied, so the insurance cover normally in place becomes insufficient.

Most insurers – whether of residential or commercial property – therefore impose a relatively short period of time when the insured premises are determined to have become vacant. For most residential property, for instance, insurers consider the building to become empty after between 30 and 45 consecutive days when no one has been living there.

And because of the enhanced risks identified in any empty property, most insurers therefore allow cover to lapse or to reduce it to a severely restricted level of protection.

Unoccupied property insurance

That is the time, therefore, when you might want to consider unoccupied property insurance in order to maintain the comprehensive level of cover you desire.

Getting the most suitable type of this standalone form of insurance to meet your particular needs and circumstances might call for specialist knowledge of the market in what is a niche product and you might therefore want to consult experts in this field – such as those of us here at Cover4LetProperty.

Whatever the reasons – and there are many – for your having to leave the property empty, the vacancy frequently has a habit of overrunning your original estimate. Finding a policy that may be flexibly extended, therefore, may be an important feature.

If you are a landlord, one of the reasons for the property becoming vacant is the termination of one tenancy and the delay until new tenants are found. There is also the rather special case of tenants who have simply abandoned the let property. Not only does this leave you an empty property on your hands but also the potentially fraught and complicated business of determining whether the tenant has surrendered or abandoned the property – a knotty problem considered further by Landlord Action.

If you have bought an empty property with the specific intention of renovating it for you to live in or to let to tenants, you may find that some insurers are reluctant to offer cover on premises such as this from inception. Once again, therefore, you might want to consult a specialist insurance provider.

Playing your part

Just as with other forms of insurance, protection for unoccupied property also anticipates you playing your part to mitigate the risks of loss or damage

The extent to which you may be expected to take reasonable precautions may depend of course on the nature of the building and whether it is normally in commercial or residential use. Amongst some of the most common conditions, however, are likely to be the following:

  • ensuring that routine maintenance is done to keep the structure and fabric of the building in a good state of repair;
  • locks, deadbolts, alarms and other security devices on doors and windows to a standard relevant to the type and size of building in question;
  • regular inspections of the premises, with a written record of each visit – clearly, there are a number of security firms that offer such inspections and Risk Management Security Services, for example, describes some of the issues involved in the inspection of an empty property;
  • for residential property many of the precautions any insurer is likely to expect you to take are largely matters of good common sense;
  • ensuring that deliveries are promptly taken inside and out of sight by a neighbour, for example;
  • asking the same neighbour to park their car on your drive – to give the impression that there is someone at home;
  • making sure that your garden continues to be tended and any litter cleared away;
  • the use of time switches to turn on a light or two in the evenings; and
  • making sure of course that all doors and windows remain firmly locked.

Precautions such as these and any other conditions your insurer might impose are important if you want to avoid the possibility of your own contributory negligence being cited by the insurer as the reason for a reduced settlement of any claim.

Further reading: Guide to Unoccupied Property.