When is a property classed as unoccupied?

Posted: 4th Jun 2014

Here are some frequently asked questions on the subject of unoccupied property and associated insurance.

What makes a property unoccupied?

In the context of insurance cover, any property without someone residing in it is described as unoccupied.

This would typically not include properties which were unoccupied on a temporary basis. That might cover situations such as annual holidays or gaps in occupancy whilst you were changing tenants.

An individual landlords’ insurance policy will typically stipulate a maximum number of consecutive days (often in the range 30-45) that a property may sit temporarily unoccupied and thereby covered, before it makes the transition to being regarded as formally unoccupied.

Why do insurance providers care?

Unoccupied property is typically at higher risk, in certain categories, than property which has a tenant in it.

Insurance providers might typically be willing to accept that higher risk if it is for a limited duration, such as some of the above temporary circumstances.

However, if you exceed the number of consecutive days outlined in the policy, your standard insurance cover may become invalid.

To avoid that happening, you may need to consider additional home insurance quotes. Unoccupied property has its own category of cover typically called, as you might imagine, unoccupied property insurance.

Do the background circumstances matter?

As a general rule, no, they do not.

Insurance providers may regard the cause of the situation to be irrelevant. So, you may need to be vigilant in situations where your property is sitting unoccupied for reasons such as:

  • probate, divorce proceedings or any other form of legal process;
  • extended holidays, delays in returning from overseas business trips;
  • tenants who failed to arrive when expected;
  • building works overrunning; etc.

There is typically no concept of whether or not you have been able to control the position – the clause will simply come into effect once the threshold number of days limit has been exceeded.

Why are landlords discriminated against in this fashion?

They aren’t!

You may be surprised to know that this unoccupied property clause might be equally commonplace in owner-occupier buildings and contents insurance.

In the event of a claim, how would the insurers know the property wasn’t occupied?

It is relatively normal practice for a claim to be examined prior to approval or rejection.

The claims department of your insurance provider may have very sophisticated means at their disposal for checking the exact occupancy status of a property at the time an event took place that led to a subsequent claim.

If they discover that the property was unoccupied then the least that is likely to happen is your claim will be rejected.

In some circumstances, if you deliberately incorrectly declared the occupancy status of your property as part of your claim, you may be leaving yourself liable to prosecution for making false insurance declarations.

It is a situation best avoided.