Short term unoccupied property insurance – what is it?

Posted: 18th Jun 2018

In order to discuss short term unoccupied property insurance, it’s necessary to define a few commonly used terms.

Empty property

The terms “empty property” and “unoccupied property” are often used loosely to describe what are, in fact, several very different property situations. They might include:

  • a property which at a given point in time, is unoccupied (by tenants or the owners) for a short period of time. That might be due to holidays or simply during the day because everyone’s out at work;
  • properties that are empty because they’re unfurnished waiting for new tenants to arrive with their own furnishings;
  • a house or flat that is under major redevelopment and which is effectively uninhabitable;
  • a home that is going to be unoccupied for a longer period for whatever reason (pending probate, overseas business secondments etc.).

That is by no means an exhaustive list.

Why does this matter?

This isn’t just a question of playing with words because the exact status of your empty property might prove to be critically important to the continuity of your property insurance cover.

To explain – the insurance industry typically uses very different definitions to think about the occupancy status of an “empty property”:

  • normal status. This means the property (whether owner-occupied or let) is occupied according to standard insurance definitions. Typically, that will include situations where the tenants might be on holiday or the property unoccupied during periods where you’re changing tenants.

The key concept here is that of duration. Typical property insurance will cover properties that are unoccupied providing that doesn’t exceed a specified maximum number of consecutive days. That’s usually a number somewhere between 30-45.

In effect, this means that even if your property is empty because the tenants are on holiday, it’s still considered to be “occupied” by your insurer. That typically suggests a no-change status in terms of your property insurance;

  • unoccupied status. This is typically taken to mean situations such as those above or any other, that result in a property being unoccupied for longer than the specified consecutive days. Once that threshold is passed, any standard property insurance might be at risk and typically, specific unoccupied property insurance will be required to ensure continuity of cover;
  • empty/uninhabitable status. Not all insurance providers necessarily consider this to be a separate category but some do. It essentially describes those properties that are perhaps in very poor condition or which are undergoing major renovation and which cannot be occupied.

Insurers’ reasoning

Insurers make these distinctions because they might typically outline very different risk profile scenarios for the properties concerned.

For example, it is widely known that unoccupied properties may be at much higher risk of burglary and vandalism that those which are occupied. Conversely, an unoccupied and perhaps gutted building under renovation might be at a very low risk of burglary but a much higher risk of vandalism and squatting.

Insurers need to be clear that they are providing the most appropriate form of cover for the risk profiles concerned, perhaps including products such as short term unoccupied property insurance, in order to protect the interests of the policyholder as well as their own.

What is the status of your property?

If you have any doubts about whether you might need short term unoccupied property insurance or any related products, it would be advisable to discuss your situation with an experienced property insurance provider such as ourselves at Cover4LetProperty.