Updated August 2023
- 1 Introduction
- 2 How long can buildings remain unoccupied and insured?
- 3 Why is an empty property such a big issue?
- 4 Common situations when a property may remain empty
- 5 How do insurers know when a building is empty?
- 6 Insuring your empty property
- 7 Risks faced by unoccupied properties
- 8 Why you may need special cover
- 9 What about responsible landlords?
- 10 Avoid risking your property
- 11 Summary
Firstly, what is an unoccupied property?
In insurance terms, an unoccupied property is a building that has no one living in it for a period of time. Even if the property is furnished and has items within it, if no one is actually living there, it is classed as unoccupied or empty.
Insurers will usually state how long a building can remain fully insured while it is unoccupied before the level of is significantly reduced or stopped. This applies to both let property insurance and owner-occupier home insurance.
How long can buildings remain unoccupied and insured?
Different insurance companies will have different rules on what classifies as an unoccupied property, and these will be clearly stated in your policy documents.
Your policy document will stipulate the amount of time that your premises can remain empty before the details of the cover change. Typically, this can be anything from 30 to 45 consecutive days. All policies are different, so this is just a guideline.
After this time period (which is set out in your agreement) your insurer may reduce full cover (down to very basic cover) or your policy may become invalid. Either way, unoccupied property insurance may typically be required in order to keep up full protection on your property.
It is important to note that if your property is mortgaged, then in most cases, as part of your mortgage contract, you are required to have at the very least building insurance at all times to protect your and your mortgage provider’s financial interests. If you allow the buildings cover to lapse or become invalid (such as due to unoccupancy), your mortgage provider can ask that you repay all the outstanding mortgage monies and interest, immediately.
Why is an empty property such a big issue?
You may consider your premises to be completely safe when it is empty, even for long periods of time. However, this is not how an insurer sees it.
They base their premiums on the level of risk posed by certain situations. When a property is empty, it is seen as presenting a greater risk in certain areas. For example:
- if no one is living in the property, problems such as leaking pipes may go unnoticed, leading to more serious damage;
- general deterioration may not get the immediate attention it deserves, again potentially causing more damage;
- thieves may be attracted to a building that is unoccupied, and they could cause damage to the building and the contents etc.
You can find some more about unoccupied property cover and the risks your property may face in our short video at the foot of this page.
Common situations when a property may remain empty
There are many situations in which both landlords and owner occupiers may have to leave their property empty for long periods of time. If you live in your home, you may decide to go on an extended holiday or gap year, or you may need to work away from home for extended periods of time.
Perhaps you are undergoing divorce proceedings, probate or other legal proceedings, all of which can lead to a house remaining empty while the paperwork is sorted.
For landlords, failing to find tenants can sometimes lead to long periods where the property remains empty. Sometimes your tenants may not turn up when they are due. In addition, you may have to carry out some building works or renovations, and these may go on for longer than you expected, which is quite common. (If you are planning on renovating your property, please check our Guide to Renovating – particularly regarding renovation insurance).
What you do need to remember is that the reason why your property is empty is unimportant to the insurer. All that may concern your provider is whether anyone is living in the building or not – and that you are taking common sense steps to protect it.
How do insurers know when a building is empty?
You may think that an insurer would not know whether your building is empty or not when you make a claim. You may therefore be tempted to claim that someone was living in it when there was no one. However, this would be a very unwise decision.
Insurance companies have a wide range of sophisticated techniques at their disposal to look into a situation before they agree to pay a claim. If they find that the property was empty during the period for which you are making your claim, and you have lied about this, they may typically refuse to pay out.
They may even start legal proceedings against you for making a false declaration, which could have serious consequences.
Insuring your empty property
If your property is going to remain empty for any of the reasons described in the previous sections, or you are worried that it may remain unoccupied in the future for any reason, you may want to avoid any problems by speaking to a specialist insurer, such as ourselves at Cover4LetProperty.
Risks faced by unoccupied properties
When a property is empty, there is a greater risk to it in the eyes of the insurance provider. There are a number of things that could happen that lead your insurer to only include cover for 30 or 45 consecutive days. These include:
- if a pipe leaks and there is no one there to see it, the damage could be severe. Even a small leak can cause a huge amount of damage if it is left unchecked for a number of days or weeks, and insurers do not want to take that risk;
- another common risk is damage caused by someone breaking into the building. Thieves may be more tempted to enter it when it is empty, and they could cause damage to the doors, windows and other areas;
- if thieves think a building is empty, they may be more likely to break in to steal your contents.
Why you may need special cover
If the amount of days your property remains empty exceeds the amount of consecutive days stipulated by your provider, you may well want to invest in extra insurance.
Unoccupied property cover is typically not included on a standard landlord or private home insurance policy. This means that if your building remains empty, you may see your level of cover reduced, or your policy may become invalid.
Unoccupied property insurance is a separate product that has an extra level of protection. It may include full cover for up to many more days than that stated in your standard policy. Short term flexible cover is also typically available from some providers.
What about responsible landlords?
You may think that if no one is living in your property, this is not a problem for you. After all, you may know that you are a responsible owner who makes checks on the building on a regular basis, and you may have installed effective security devices like a house alarm to prevent thefts.
But while these are good ways to improve protection, it does not make much difference to the insurer. Providers cannot know whether you are responsible or not, and they simply cannot take the risk. So even if you take good care of your building, you may still need to consider this type of insurance.
Do also note any legal implications as mentioned before – if you have a mortgage on your property, then as part of your contract with your lender, you are typically obliged to have adequate buildings insurance at all times, whether empty or not.
Avoid risking your property
The reason you have protection for your property in the first place is that you want to ensure that your investment is safe – as well as meeting your obligations to your mortgage lender (if you have a loan on the property).
It may be a shock to discover that it is not covered when you thought it was, and this is certainly not something that you want to find out when you make a claim. You may therefore want to invest in this type of insurance to avoid problems so consider your own circumstances and decide whether it is a suitable option for you, or seek specialist advice.
Just to recap, there may be many reasons why your property sits unoccupied for a period of time.
That may not be an issue for your existing property insurance, unless the period concerned exceeds the specified number of consecutive days – which you might find to be somewhere in the region of 30 to 45.
If so, you may need to think about unoccupied property insurance:
- the reason your existing policy may not cover extended periods without occupants, relates to the simple fact that insurance providers typically consider unoccupied properties to be at greater risk of a number of different problems than those with occupants in them;
- many of these are relatively self-evident. For example, thieves and vandals might, by definition, find an unoccupied property far more attractive than those where they may run a higher risk of being disturbed as they go about their business;
- other increased risks might be rather more subtle. One such example might be that properties might suffer damage from unnoticed problems that may have been spotted and corrected had someone be there to see them. Perhaps the classic illustration might be a leaking pipe;
- if you do take out unoccupied property cover, your policy might oblige you to take certain steps to reduce the risks of problems arising in some of these areas. For example, your policy may require you to switch off some or all of the utilities at the point of entry into the property. That might include things such as gas, water and electricity – though in some instances, the insurance provider might require you to leave the central heating on at a lower level during periods of intense cold;
- it is equally likely that your policy will oblige you to take all reasonable steps to avoid advertising the fact that your property is unoccupied. That might include things such as maintaining the exterior in tidy and lived-in condition and avoiding the accumulation of post in letter boxes etc.;
- although it might well be considered to be common sense anyway, in order to qualify for this cover you may also need to commit to regularly visiting your property in order to correct any problems that you discover, thereby reducing the possibility that they will cause on-going and progressive damage. You might also need to keep a log of any such visits plus a list of any issues you have discovered and dealt with. You can of course, delegate this to a managing agent;
- you may require this form of additional cover irrespective of the cause of your property sitting unoccupied. Divorce, probate, redecoration or delays in finding new tenants, might all result in your standard policy becoming invalid unless you take steps to cover those extended periods without occupants.
Finally, note that there are different variants of unoccupied property insurance, ranging from the basic cover offering FLEA cover (Fire, Lightning, Explosion and Aircraft) to the more comprehensive cover. We also offer flexible policy lengths -3 and 6 month cover – too.
If you have any questions or concerns regarding your property and insurance, please contact us on 01702 606 301 – we’d be delighted to help!
Further reading: Guide to protecting your property.