What is unoccupied property insurance?

Posted: 29th Nov 2018

Why is unoccupied property insurance necessary?

This is one of the questions we’re most frequently asked by property owners – who point out that they already have home insurance, landlord’s insurance or commercial property insurance and have no wish to ensure the building or its contents twice over.

But the answer to the question what is unoccupied property insurance recognises that there are times when circumstances change – and that spells the need for specialist insurance once your property has been unoccupied or vacant for longer than a specified time.

When do you need empty property insurance?

Unoccupied property insurance – also known as empty or vacant property cover – offers protection for your property when it is standing empty.

By “empty” we mean that no one is living there. The property could still be furnished, but if no one is residing there, then it will still be classed as a vacant or unoccupied property after a number of consecutive days.

What happens to standard building and contents policies?

Whether your property insurance is for an owner occupied home, but to let accommodation or commercial premises, it is typically written to provide cover during its occupation by the homeowner, tenants or leaseholders.

Some allowances are made for things such as your own holidays, tenants’ holidays, changeovers of tenancy, 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 the property stand unoccupied for longer than that, the policy may well become invalid and you risk having claims rejected.

When is a property likely to be unoccupied for longer than a month or so?

If you are a homeowner, you might need to leave your property empty for an extended period to:

  • work on a contract that takes you away from home or even abroad;
  • refurbish or renovate the property to such an extent that it is temporarily uninhabitable;
  • take an extended holiday abroad – to stay with relatives or friends overseas, for example, or to take a world cruise;
  • safeguard an inherited property that is currently in probate; or
  • you have split up from your partner and moved out of the marital home whilst waiting to sell it.

If you are a landlord, your buy to let property might also be vacated whilst it is undergoing refurbishment or renovation, tenants might be taking an extended holiday or working away from home for longer than a month or so, or there might be a longer than usual interval between one tenancy ending and new tenants moving in.

A property tends to be unoccupied (and then requires special empty property cover) after a defined period of time by your existing landlord’s insurance or owner-occupier home insurance policy. This typically varies from between 30-45 consecutive days, so check out your existing cover to make sure you know how long your property can stand empty before you need to take out additional cover.

What are some of the myths about unoccupied property insurance?

Bear in mind that the additional protection of empty or vacant property insurance 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 insurance here.

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.

Why does my standard building and contents cover become restricted or lapse after a specified period of vacancy?

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.); and
  • burglary, vandalism and perhaps squatting.

True, some risks may reduce – such as liability claims from tenants, if you are a landlord – 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.

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.

Can’t I just “make do” with my existing property insurance?

You might think that although your property is empty, you can “make do” with your existing insurance – whether that is standard home insurance, landlords’ insurance, or commercial property insurance.

Doing so, however, will typically invalidate your existing policy and means you will not be able to make a claim under it, should you need to.

Unoccupied property cover is a very important aspect to protecting your empty property, so if you have any questions or are unsure as to the status of your property, please feel free to contact us to compare empty property insurance on your behalf and you may even arrange your unoccupied property insurance online.

What cover is provided by unoccupied property insurance?

It is necessary to read a policy carefully in order to establish exactly what cover is provided, however, you may find that generically the cover relates to unoccupied properties.

In insurance, an unoccupied property is typically defined as one that has had nobody in residence for a period of 30 days or over.

At that point, any standard homeowners’, landlords, or commercial property insurance would become void.

Vacant property insurance is typically required for properties that meet the criteria for definition as being unoccupied.

What if the reasons for the property being unoccupied were beyond anyone’s control?

It isn’t possible to give a definitive answer, as that may depend upon your specific insurance policy. Typically, however, the cause won’t be a factor.

If, for example, you were let down at the last minute by tenants who failed to arrive as planned, once your property went over the 30 days, it would still usually be classed as unoccupied.

Note that insurance providers typically have ways of establishing whether or not a property was occupied at the time any incident arose subsequently resulting in a claim.

Is unoccupied property insurance all that is required?

That depends, once again, on the terms and conditions of your vacant property insurance.

Some policies of that type may require you to make periodic inspections of the property while it is unoccupied and to keep external areas in very good condition (as a way of making it hard to spot that the property is unoccupied – thereby deterring thieves etc).

What if building works are in progress underway?

Typically, the same 30 to 45-day rules would apply.

Having people present in your property during the day does not make it occupied as far as insurers are concerned.

What happens if I leave it furnished?

This would also make no difference to the requirement.

The definition relates specifically to occupancy and is nothing to do with whether or not your property is empty or otherwise (in the sense of furnishings, fixtures and fittings).

What about if someone sleeps there for one night before the 30 days expires?

This is a point of fine detail that can really only be answered by looking at the specifics of a policy and perhaps getting a comment from the insurance provider.

As a general rule, it may be advisable to play safe and arrange unoccupied property insurance if you believe your property is likely to be pushing the 30-day boundaries.