If you own an empty house or flat, you will want to compare unoccupied property insurance to find the most cost-effective and appropriate solution for you – the solution that offers genuine value for money.
This article discusses the principle of unoccupied property insurance – what it is, who needs it, and what you might want to consider when comparing empty let property or home insurance quotes.
What is an unoccupied property?
Broadly speaking, the insurance industry defines property as unoccupied when its occupants have been absent for a specified maximum number of consecutive days as set out in the insurance policy documents.
The interval specified in the policy documents is typically between 30 and 45 days although the precise period may vary according to the particular policy and the insurer in question.
When that period expires, the existing insurance cover will typically lapse altogether or become severely restricted – this can leave the cover reduced to that against floods, lightning, earthquakes, and explosions, which is so-called FLEE cover. To restore the full protection normally provided by your property insurance, therefore, you will need specialist unoccupied property insurance – which may also be known as empty or vacant property insurance.
Why is empty house insurance needed?
Insurance is about the management of risk – and insurers invariably regard an unoccupied property as a higher risk than a property that is occupied.
The logic behind this is simple:
- unoccupied properties may be far more attractive to burglars and vandals – in a special briefing for members of the Royal Institute of Chartered Surveyors (RICS), security specialists VPS warned that around half the property fires in the UK are deliberately started in acts of arson; and
- empty properties are at greater risk of contents suffering theft, loss or damage, and also structural damage resulting from otherwise relatively minor maintenance issues – such as leaks, broken windows, slipped slates, and the like – which can nevertheless develop into incidents involving extensive damage if they are not promptly dealt with.
What is the difference between vacant and unoccupied?
Typically, insurers make little or no distinction between an unoccupied and an 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 unoccupied – even if it is furnished.
If you have the builders to work on an extension or renovate your property, they may be there throughout the working day but naturally, leave it empty during the night and on days off – if no one is living there while the building works are in progress, the property will be regarded as unoccupied.
Who may need unoccupied home insurance?
Empty property insurance may be required by homeowners, landlords and other owners of property that is classed as empty, vacant, or unoccupied. The reason the property is empty is largely irrelevant. It could be the result of:
- a longer than usual search for new tenants while you wait for them to move in;
- the property is in probate or the subject of divorce proceedings;
- occupants have moved out while renovations or modifications are in progress – these can very easily overrun, no matter how carefully you may have planned the work;
- you are going on an extended business trip or perhaps 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 small print 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.
Should it remain unoccupied after that initial period has expired, then elements of your cover may become null and void. The only solution in such situations is to take out a specialist unoccupied property policy.
You may be interested to know that this condition also typically exists in home insurance policies for owner-occupiers – it is not only an issue for landlords.
Unoccupied property insurance and probate
When someone dies, he or she will typically 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 – and these are typically identified in the deceased’s will.
This legal process is called probate and it may have an effect on the insurance of a property that you own, administer, or have the expectation of inheriting:
- when 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 empty and unoccupied;
- while the necessary legal processes concerning inheritance and transfer of ownership are undertaken, it might in some circumstances be impossible to do much with the property concerned before completion of probate;
- once a property sits unoccupied for more than a period of time specified within any buildings and contents insurance policy, any existing cover may become invalid;
- cover may only be maintained by arranging suitable 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 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 the appropriate unoccupied property insurance if nobody is currently living there; and
- it is also worth bearing in mind that once you do have appropriate cover in place, the policy may require someone to regularly inspect the property and to keep it in a tidy, lived-in, and well-maintained state of repair – care for the external appearance of the property may help to deter thieves, burglars, vandals, and squatters.
If you are the beneficiary of an inheritance relating to a 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 may come to light only too readily during the routine investigations made by any insurance company in the event of your making a claim on the policy. That might lead to your claim being rejected.
That is likely to 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 similar distinctions also apply 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
Naturally, different unoccupied property insurance policies will have different terms and conditions – as you may see when you compare unoccupied insurance quotes. These differences could include requirements to:
- arrange for the property to be inspected regularly and maintain it in a good state of repair;
- keep a log of those inspection visits made and any work undertaken;
- maintain the garden and, if you have the builders in, clear away any rubble and debris; and
- if possible, arrange for a light to switch on automatically when darkness falls – to give your property a lived-in look to help deter thieves and vandals.
Next steps
If you compare empty property insurance policies, you may quickly be able to find the cover that most suits your own particular needs and 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
