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What is unoccupied property insurance?

Why is unoccupied property insurance necessary?

One of the most frequently asked questions (FAQs) we’re asked here at Cover4LetProperty is why unoccupied property insurance is necessary. The property owners in question already have home insurance, landlord’s insurance or commercial property insurance and have no wish to insure the building or its contents twice over.

The answers to other FAQs may help to show that when circumstances change, specialist unoccupied property insurance may be necessary once the premises have been empty or vacant for longer than a specified time.

When do you need empty property insurance?

Unoccupied property insurance – also known as empty or vacant property cover – offers protection for your property when it is standing empty.

By “empty” we mean that no one is living there, or a commercial building is no longer in use. The property could still be furnished, but if no one is living or working there, then it will still be classed as a vacant or unoccupied property after a number of consecutive days.

What happens to standard building and contents policies?

Whether your property insurance is for an owner-occupied home, buy to let property or commercial premises, it is typically written to provide cover during its occupation by the homeowner, tenants, or leaseholders.

Allowances are made, of course, for intervals such as your own holidays, tenants’ holidays, changeovers of tenancy, and redecorating, but most policies will contain a stated maximum number of days that cover will continue while the property stands unoccupied. Typically, that’s somewhere between 30-45 consecutive days – but the precise period may vary from one insurer to another.

Should the property stand unoccupied for longer than that, insurance cover is likely to become restricted to only a few major risks or may even lapse entirely – in which case, of course, any claim you make will fail.

When is a property likely to be unoccupied for longer than a month or so?

If you are a homeowner, you might need to leave your property empty for an extended period to:

  • work on a contract that takes you away from home or even abroad;
  • refurbish or renovate the property to such an extent that it is temporarily uninhabitable;
  • take an extended holiday abroad – to stay with relatives or friends overseas, for example, or to take a world cruise;
  • safeguard an inherited property that is currently in probate; or
  • you have split up from your partner and moved out of the marital home whilst waiting to sell it.

If you are a landlord, your buy to let property might also be vacated whilst it is undergoing refurbishment or renovation, tenants might be taking an extended holiday or working away from home for longer than a month or so, or there might be a longer than usual interval between one tenancy ending and new tenants moving in.

What are some of the myths about unoccupied property insurance?

Bear in mind that the additional protection of empty or vacant property insurance cover applies to unoccupied properties and not just those that have been left unfurnished. From time to time, a customer might insist that “my property is furnished, so it counts as occupied”. This could prove a costly misunderstanding and error. In fact, your property is considered “unoccupied” after the specified number of days have elapsed even if it is still fully furnished.

There are also several other myths relating to presumed exceptions to the unoccupied property conditions in a typical policy. They too could be equally damaging. To avoid putting your cover at risk, it might be a good idea to review our guide to unoccupied property insurance here.

Quite often, potential unoccupied property insurance policyholders ask: “is it worth it”?

It’s a fair question but one that could be asked for any insurance. Neither we nor anyone else can say for certain whether your particular property will suffer the loss or damage resulting in a claim while it stands formally “unoccupied”. All we can do is highlight the fact that should such a situation arise, your claim may be rejected if you do not have an appropriate form of cover in place.

You should also note that if you have a mortgage on the property, then you are typically legally obliged to always have adequate buildings insurance in place at all times to protect both you and the mortgage lender’s financial interests.

Why does my standard building and contents cover become restricted or lapse after a specified period of vacancy?

When your property is unoccupied, it is statistically likely to be more vulnerable to risks such as:

  • damage arising from unnoticed, unreported, or unattended maintenance problems – so that an otherwise relatively minor fault escalates into a full-blown emergency; and
  • unauthorised intrusions by burglars, vandals, squatters, or even arsonists.

True, some risks may reduce – such as liability claims from tenants, if you are a landlord – but the overall net effect is that the nature of the insurance required to protect your interests will change if your property is unoccupied. That’s why at Cover4LetProperty we always advise property owners to discuss their insurance needs with us if they think their property may stand unoccupied for more than the specified number of days prescribed in their policy documents.

By way of illustration, it is no accident that for many years the police have given specific advice to help prevent burglaries when properties are unoccupied. That’s because they know such properties are a preferred target for burglars – and so does the insurance industry.

Can’t I just “make do” with my existing property insurance?

You might think that although your property is empty, you can “make do” with your existing insurance – whether that is standard home insurance, landlords’ insurance, or commercial property insurance.

Doing so, however, will typically invalidate your existing policy and means you will not be able to make a claim under it, should you need to.

Unoccupied property cover is a very important aspect for the protection of your empty property, so if you have any questions or are unsure as to the status of your property, please feel free to contact us so that we can compare empty property insurance on your behalf. You may even arrange your unoccupied property insurance online.

What cover is provided by unoccupied property insurance?

You will need to read a policy carefully to establish exactly what cover is provided. However, several aspects will be common to practically any of the unoccupied property insurance products currently on the market.

The principal objective of any such cover is to re-establish the protection you typically enjoy when the property is inhabited or in more or less constant use.

At Cover4LetProperty we offer three levels of unoccupied property insurance cover, so you can choose the most suitable solution for your own unique needs.

What if the reasons for the property being unoccupied are beyond anyone’s control?

It isn’t possible to give a definitive answer, as that may depend upon your specific insurance policy. Typically, however, the cause won’t be a factor.

If, for example, you were let down at the last minute by tenants who failed to arrive as planned, once your property went over the permitted 30 to 45 days, it would still usually be classed as unoccupied.

Honesty is the best policy when it comes to informing your insurer that the property will be unoccupied. Insurance providers typically have ways of establishing whether a property was occupied at the time any incident relating to a claim might have arisen – your claim will be rejected if you have been anything less than completely honest.

Is unoccupied property insurance all that is required?

That depends, once again, on the terms and conditions of your vacant property insurance.

Some policies may require you to make logged, periodic inspections of the property while it is unoccupied and to keep external areas in very good condition (as a way of making it hard to spot that the property is unoccupied – thereby deterring thieves and other intruders).

What if building works are underway?

Typically, the same 30 to 45-day rules would apply during any period when there are building works in progress and the property remains unoccupied for the duration.

Although tradesmen and builders may be present during every working day, that does not make the property occupied as far as your insurers are concerned.

What happens if I leave the property furnished?

This would also make no difference to whether or not your insurers consider the property to be unoccupied.

The definition relates specifically to occupancy and is nothing to do with whether your property is empty of furnishings, personal effects, and the like.

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