If you believe that your property may about to be vacant for a significant length of time, you may need to think about unoccupied property insurance. So, this article looks at what is empty property insurance, when might you need it and, what does it cover, as well as other considerations.
Why property you own might be temporarily unoccupied
There may be good reasons for homes in perfectly good condition – whether normally occupied by their owners or by a landlord’s tenants – becoming empty and vacant. For instance:
- the property may be subject to probate before its eventual fate may be determined;
- it may have been a marital home now awaiting the settlement of divorce proceedings;
- the owners may have left for an extended holiday visiting relatives overseas;
- work commitments may mean that the owner may be living elsewhere for the duration of an employment contract;
- the property may be undergoing extensive refurbishment or renovation, making it unfit for habitation for the duration of the building works; or
- a let property may be vacant during the interval between one set of tenants moving out and the time it takes to sign up new tenants.
Insurance when your property becomes unoccupied
Although you might well have arranged adequate and appropriate insurance during the time you are living in your home or it is occupied by tenants, most insurers severely restrict that cover – or consider it to be lapsed altogether – once the property has been unoccupied for a period of, say, 30 to 45 consecutive days.
The precise period may differ from one insurer to another, but if your property is going to be empty for more than a month or so, you may expect the level of cover to be seriously affected at some point or another.
Why the change in cover?
The reason for insurers changing the level of cover provided – or removing it altogether – when the property becomes empty is simply a reflection of the calculation of the risks involved. The assessment of risk, of course, is the basis on which all insurance is agreed.
In the case of a property which is left empty and unoccupied for any period of time (more than a month or so), the risks of loss or damage become significantly greater:
- a relatively minor repair – such as a dripping tap, for example – might develop into a major incident if there is no one living on the premises to spot the problem and arrange for the appropriate remedial action;
- an empty property is also vulnerable to the unwelcome attention of vandals, squatters, burglars and arsonists.
Specialist unoccupied property insurance is designed to ensure that your home or buy to let investment continues to enjoy the appropriate level of protection even when it is empty or vacant.
What does empty property insurance cover?
Empty property insurance is designed to step in when the existing cover provided by your main building and contents insurance inevitably reduces – or lapses altogether – whenever it is left empty and unoccupied for longer than a month or two.
It may provide relatively basic cover – if the property has little of value within it, for example – or it may provide as comprehensive a degree of protection as the property insurance that normally protects it when it is in continuous occupation
Depending on the level of cover you opt for, it provides protection against loss or damage to the building and its contents.
It may also continue to protect you against claims of your liability as the property owner or landlord if someone is injured or has their own property damaged in the course of contact with your home.
You have this duty of care even to those – such as squatters, vandals or burglars – who may have entered your property illegally. If they are injured or have their property damaged, they may still sue you for damages.
In any event, public liability claims may assume substantial proportions – especially if personal injury is involved – so indemnity of at least £2 million is offered by the typical unoccupied property insurance policy, and it is not uncommon for indemnity to be offered against much larger claims – up to even £5m.
It covers just what you might expect and hope it to cover – by providing whatever level of protection you choose as a standalone alternative or substitute when the property you own needs to be left empty
Unoccupied property insurance is also very flexible. If you know that your property is going to be unoccupied for only three months or so, for example, it is possible to arrange cover just for that period, rather than for the full 12 months of the year.
Appropriately enough, this form of cover might be called 3-month empty property insurance.
On the other hand, if the vacancy extends beyond the interval you originally anticipated, unoccupied property insurance is typically flexible enough for you to extend the cover for as long as you need – you, of course, do need to inform your insurance provider of any cover extension required.
When arranging empty property insurance, you might want to consult a specialist provider – such as those of us here at Cover4LetProperty – since there may still be different levels of protection offered by different policies, principally for example:
- FLEA – cover which is restricted to the perils of fire, lightening, aircraft and explosion;
- FLEEA – that which includes the fire, lightening, aircraft and explosion risks of FLEA but also adds the peril of earthquakes;
- all risks – which includes all of the risks included in FLEEA cover but also may restore to your property protection against the full range of perils typically covered by your standard home or landlord insurance, in other words, including such risks as storm damage, flooding, theft, malicious damage and theft, for example.
Your obligations under your unoccupied property insurance
Responsibility for taking care of your home or let property does not end when you arrange unoccupied property insurance. You still have an obligation to take all reasonable steps to mitigate the risk of loss or damage as well as fulfil your obligations under your insurance contract.
- you may, for example, be required to visit your property regularly while it is unoccupied and arrange for normal maintenance to be carried out, as well as fix any problems or issues that you find;
- keeping the garden tidy and rubbish free may also be required and you may be asked to drain down heating and water systems or, alternatively, keep the property at a minimum temperature during the colder months;
- you might also be asked to keep a log of visits made and the work carried out on each occasion you visit;
- these general principles apply irrespective of whether or not your property is furnished or empty at the time – the key concept applicable is whether or not it is occupied or unoccupied.
Finding the most suitable empty property insurance
Like most forms of insurance, you are likely to find the most appropriate and cost-effective cover the more carefully you look around and the better informed your sources of advice – from experts such as ourselves here at Cover4LetProperty, for example:
- by using a specialist broker such as ourselves, you might be assured of some of the most competitively-priced policies in the market – without skimping on the insurance cover you need;
- since the needs vary between different property owners and what is cheap empty property insurance for one might appear less so to another, you are likely to be looking for value for money, rather than the absolutely cheapest deal;
- unoccupied property insurance is designed to take over where your regular home or landlord insurance leaves off once your property has been empty for a month or so – and 3-month empty property insurance is clearly much cheaper than having to buy cover for the whole year;
- if you are looking to save money on the cost of unoccupied property insurance, you need to take the same degree of care in establishing what you want covered and to what amount;
- depending on the kind of property you are leaving vacant, and the length of time it is likely to remain empty, you might be content with relatively basic cover – which unoccupied property insurance is certainly flexible enough to provide;
- in the case of your own home, however, you are likely to look for a comprehensive form of unoccupied property insurance;
- even if you are looking to economise, buildings cover needs to be sufficient to pay for the cost of completely reconstructing the property in the event of a major disaster and contents need to be insured to their full replacement value;
- you also need to maintain an adequate level of property owner’s liability insurance against claims made by any neighbour or member of the public who may be injured or have their property damaged as a result of contact with your empty property – even including individuals who may have entered the property illegally.
Buying cover from a specialist
When arranging your empty property insurance, you may also want the ease and convenience of getting an unoccupied property insurance quote online, buying it online yet also being able to discuss your particular needs or to ask questions on the telephone. That is why are friendly, professional team are also available on 01702 606 301.
When you consult a specialist provider, you may be assured of the type of personalised service which may be absent if you are dealing with a large national chain or buying direct from an insurer.
In the meantime, and to help address your natural worries and concerns about all the risks of loss or damage to your property when it is left empty, we have published a detailed Guide to unoccupied property. Please also watch our short video at the end of the page here.