If you have an unoccupied property, it is imperative that you compare empty house or flat insurance options to find the most cost-effective and appropriate solution for you. This article discusses what is unoccupied property insurance, who needs it and, finally, considerations when you compare empty let or home insurance quotes.
What is an unoccupied property?
Broadly speaking, within the insurance industry a property is defined as unoccupied at the point at which a property without occupants passes the specified maximum number of consecutive days of cover provided, as standard, by a buildings insurance policy.
Typically, the amount of days tends to be more than 30-45 consecutive days (the exact period of time depends on the individual policy and insurance provider).
So, at that point, your existing buildings insurance cover will lapse or the cover become severely restricted meaning you will need unoccupied property insurance (also known as empty or vacant property insurance).
Why is empty house insurance needed?
Typically, insurance companies regard unoccupied properties as being in a higher risk category than properties that are occupied.
The logic behind this is simple:
- unoccupied properties may be far more attractive to burglars and vandals;
- they may be more at risk of contents or even structural damage arising from problems that go unnoticed (leaks, broken windows, slipped slates etc). These problems then can cause extensive damage if they are not attended to.
What is the difference between vacant and unoccupied?
Typically, no differentiation is made in this sense between an unoccupied or empty building. If you are not living, or you do not have tenants (or anyone else) living in your buy to let property, then it will be deemed as being unoccupied – even if it is furnished. And even if your house is being renovated and you have builders there during the day but you or your tenant is not living there, then it will still be classed as vacant.
Who may need unoccupied home insurance?
Empty property insurance may be required by homeowners, landlords and other people in possession of a property that is classed as empty. The reason the property is empty is largely irrelevant. It could be as the result of:
- you looking for new tenants of just waiting for them to move in;
- the property being in probate or tied up pending the result of divorce proceedings;
- renovations or modifications being carried out (these can overrun very easily, no matter how carefully you may have planned the work);
- you going on an extended business trip or maybe you are treating yourself to the holiday of a lifetime.
My property is going to be unoccupied for three months. Am I still covered?
The answer is almost certainly not, although you may need to check the exact detail of your policy to be absolutely certain.
Many insurance providers understand that your house or flat may have no one living there at times due to reasons such as annual holidays, tenant changeovers (if yours is a let property) and so on. That’s why you may find that a typical buildings and contents policy will provide cover for empty properties for up to a specified number of consecutive days.
Once your property passes that number of days, should it remain unoccupied, then elements of your cover may become null and void. The only solution in such situations is to take out a specific unoccupied property policy.
You may be interested to know that this condition also typically exists in owner-occupier buildings and contents policies. It is not only a landlord’s insurance issue.
Landlords and your empty property
If you are a landlord, it is important to note that your buy to let insurance may become invalid – or the cover severely restricted – once your building is classified as being unoccupied.
As a result, you may require empty property insurance if you have a property standing for more than a certain amount of days between lettings or if you’re having building work done to it, for example.
Unoccupied property insurance and probate
Sadly, people die and when they do, they may leave property and other items of their estate behind. A legal process needs to be completed before they can be distributed through inheritance to whoever the beneficiaries of the estate may be.
This legal process is typically described as probate and it may have an effect on the insurance of a property that you own, administer or are in the process of inheriting:
- if somebody dies, whether or not they have left a will, there may inevitably be a period during which any property they owned and lived in, is sitting unoccupied;
- while the exact legal processes surrounding inheritance and transfer of ownership are undertaken, it might in some circumstances be impossible to do much with the property concerned before completion of the said probate;
- once a property sits unoccupied for more than a period of time specified within a buildings and contents policy, any existing insurance may become invalid;
- cover may only be maintained in a situation where you have taken out a policy providing unoccupied property insurance – probate itself makes no difference to this requirement;
- the conclusion here is relatively straightforward, if you are responsible for the administration of a property under probate or are expecting to inherit it in due course, you should take all steps to make sure that it is covered by appropriate unoccupied property insurance if nobody is currently living in it;
- it is worth bearing in mind also that once you do have appropriate cover in place, the policy may require someone to regularly inspect the property and to keep it in tidy lived-in external appearance. That is a measure required in order to deter thieves, burglars, vandals and possibly squatters.
If you are the beneficiary of an inheritance relating to property, the original owner may well have intended that you should obtain a degree of financial benefit from the property concerned.
It is therefore in your best interests to be sure that you understand what role unoccupied property cover may play in that process.
What happens if I don’t take out this revised form of cover?
Aspects of your insurance protection may simply lapse.
Your property’s empty status might easily come to light as part of the routine investigations made by an insurance company in the event you need to make a claim on your policy. That might lead to your claim being rejected.
It might be a risk that you decide is simply not worth taking.
How to compare vacant property insurance
Not all let property insurance offers the same degree of cover and that also applies to empty property insurance.
For example, some policies may offer only market value replacement for your contents whereas others may provide new-for-old replacement. There may be a slight cost difference between the two but one may suit your requirements better than another.
Some unoccupied home insurance policies will offer elements of cover as standard while others may not – that is why it is important to not just compare the cost of the cover, but the policy features and benefits.
Terms and conditions
Different vacant house insurance policies may have different terms and conditions, as you may see when you compare unoccupied insurance quotes. These could include requirements to:
- arrange for the property to be inspected regularly and have ongoing maintenance and repairs carried out;
- keep a log of visits made and work undertaken;
- try and keep the garden tidy and if you have builders in, to try and keep it clear of rubble etc;
- if possible, to arrange for a light to go on when darkness falls to give your property a lived-in look to help deter thieves and vandals.
If you compare empty property insurance policies, you may quickly be able to find the cover that most suits your own particular set of circumstances. Of course, we are always on hand to help you find the insurance cover you need, so please always feel free to ‘phone us on 01702 606301. One of our dedicated team will be delighted to help!
Further reading: Guide to Unoccupied Property