In the perfectly normal course of events, there may be times when your property stands empty and unoccupied. What is the status of your property insurance at those times? It might not be an issue – but it may become one. If your property stands unoccupied for more than a specified number of consecutive days, your buildings and contents insurance could be at risk.
So, who is likely to need unoccupied property insurance and what exactly does it cover?
What is empty property insurance – and who needs it?
Insurance providers look to understand the risks they are covering when they offer you a policy – that is the very nature of insurance.
Should the risks they are covering change, insurers also typically take the opportunity to reconsider the suitability of the existing policy. If the risks change sufficiently, your insurer reserves the right to decide that the existing policy is no longer valid and that something more suitable needs to be put in place.
This basic principle applies to all insurance – including property cover.
If your property moves into what is called “unoccupied status”, the risks associated with it will typically change sufficiently to justify the insurance provider requiring a different form of cover to be put into place.
If you fail to notify such a change and subsequently make a claim against the original policy, your claim may be refused.
When risks change
When a property is unoccupied, the risk of significant events such as burglary and vandalism increases along with relatively minor problems (a leaking pipe, for example) that if left unnoticed may nevertheless turn into major problems that cause substantial loss or damage.
At Cover4LetProperty, we know that sometimes the question of empty versus unoccupied property status can cause a little confusion for some property owners.
To be clear, the reason your property is unoccupied doesn’t matter in terms of a typical buildings insurance policy. You will typically need to take action to protect your interests in cases such as:
- the death of a relative means you’ve inherited an occupied property – whether it’s furnished or empty – since you may also be legally responsible to protect the value of the property if you’re the executor of a will;
- you are going to be working away from home for several months or so;
- you are taking an extended holiday for a similar period of time; or
- you are remodelling or refurbishing your property and need to move out for the duration of the work.
Buy to let landlords
If you are the landlord of buy to let property, one of the last things you want is the so-called “void” – the time during when no tenant is in residence, and you, therefore, have none of the rental income on which your business relies.
But there may be occasions when that state of affairs is unavoidable, if for instance:
- you have bought a previously abandoned property and are looking to refurbish it before letting it to tenants;
- the buy to let property you own is currently undergoing works and needs to be left vacant whilst the works are in progress or you’re unable to let the property when planned due to over-running re-decoration or other works;
- there is a longer than usual interval between one set of tenants leaving and new ones moving in;
- you are planning to sell the property and want to offer vacant possession to any new buyer;
- your tenants have notified you of their intention to take an extended overseas trip for business or pleasure purposes; or
- it’s proving difficult to find tenants – for whatever reason.
Insurers understand that a property cannot be occupied 24/7. That is why both owner-occupier and landlord insurance policies will usually make some allowances for insurance cover to continue when the property is unoccupied for shorter durations. Those shorter durations normally include situations such as holidays, tenant changeovers, business trips and so on.
While this is reasonable and reflects real life, policy providers typically restrict the unoccupied cover included in a standard property policy to a specified maximum number of consecutive days. That figure is usually somewhere in the range of 30-45 consecutive days. The amount may vary from insurer to insurer.
Once a property stands unoccupied for longer than that specified number of consecutive days, it will become formally classified as “unoccupied” and will require separate, standalone unoccupied property cover going forward if continuity of protection is required.
Your insurer typically pays little attention to the reasons for any period the property stands unoccupied and relies solely on the fact that it has become unoccupied.
It doesn’t matter whether you have experienced delays in finding new tenants or as an owner-occupier; whether you have been detained unexpectedly overseas on an extended business trip. In either case, you will typically need separate unoccupied property cover to maintain the protection your property requires.
A specific point for landlords to note is that even in situations where tenants are continuing to pay rent as normal, if they have left the property unoccupied whilst they are taking an extended holiday, for example, or a lengthy business trip, the same basic principles will apply – if no one remains in the let property for that period, it is unoccupied.
In other words, a standard home insurance policy, or typical landlord insurance policy will only maintain its full protection of your property for a specified maximum number of consecutive days without someone in residence.
So, who needs unoccupied property insurance?
Once your property is formally regarded by your insurer as unoccupied, elements of the cover provided might typically change or cease.
As we have explained, the risks from burglars and other intruders or emergencies requiring repairs or maintenance significantly increase when the property is unoccupied. The home insurance or landlord insurance that otherwise normally protects the property becomes inadequate when it stands unoccupied.
If it does become unoccupied – or appears likely to – that is when you need to compare empty property insurance policies and consider arranging unoccupied property insurance online.
Unoccupied property insurance
It may be helpful to review some of the many risks to which any unoccupied property is exposed:
Theft and vandalism
- empty and unoccupied buildings are easy targets for criminal damage, theft, and vandalism;
- the resulting dilapidation can accelerate the property’s decline and rapid loss of value;
Maintenance and repair
- when there is no one at home or no tenants in your property, problems needing otherwise routine maintenance and repair are going to go unreported and may therefore develop into full-blown incidents – a dripping tap, for example, might soon leave the property flooded;
- the British weather is nothing if not unpredictable – and when your property is unoccupied, storm damage, high winds, ice or snow may cause problems which are again unreported and have the potential for causing considerable damage;
- a property that is left empty and unoccupied may be at much higher risk of infestation by rodents or other pests – eradicating the problem may require specialist services, suggests the government website, in view of the law and regulations on the control of such pests.
Unoccupied property insurance
At times when your property is empty for a pre-defined period, specialist unoccupied property insurance is required. Unoccupied property insurance is very much what the name suggests – it provides insurance cover for your property – whether that is your home, let property, holiday home or commercial property.
When you look more closely at just what this type of insurance covers and compare empty property insurance, however, you may find that considerable care and attention continue to be required.
Some versions of the product, for example, restore an element of cover, but it is restricted to so-called FLEA or FLEEA risks – Fire, Lightning, Explosions and Aircraft (FLEA) or Fire, Lightning, Earthquake, Explosions and Aircraft (FLEE), respectively.
Other versions may offer reduced levels of cover or exclusions for specific risks, such as flooding.
At Cover4LetProperty, we offer three levels of unoccupied property cover, so you can choose the level that is most suitable for you.
What do you want unoccupied property insurance to cover?
Empty property insurance may be tailored to cover exactly what you want it to cover.
Depending on the type of premises and the reasons for it being empty, you might choose relatively basic cover. More comprehensive protection against a wider range of risks and perils, including cover for the contents too, may be needed if the property is your own home for instance.
Your objective is to secure the level of cover you require for your particular empty property.
Comprehensive empty property insurance, for example, fully restores the protection you enjoy with your usual home insurance or landlord insurance when the property is more or less continuously occupied.
In that way, you may rest assured that your unoccupied property and its contents remain covered against the full range of risks – including fire, flooding, storm damage, impacts (from vehicles and falling objects), vandalism and theft.
Property owner’s liability insurance
Also restored is indemnity against your property owner’s or landlord’s liability, in the event of any third party – including neighbours and members of the public – being injured or having their property damaged and holding you liable. Claims such as these may run into very substantial amounts – and may even be made by persons who have gained entry to your property illegally or without your authorisation.
In recognition of the size of potential claims – especially those involving personal injury – indemnity of at least £2 million (and often more) is customarily provided. Empty property insurance arranged by Cover4LetProperty, for example, typically provides a generous £5 million of indemnity.
This gives you peace of mind against claims not only from entirely innocent parties but also from those such as squatters, arsonists and vandals who may have entered illegally (but may still have recourse to allegations that the property owner is liable for any injury or property damage they suffer).
Specialist insurance from a specialist provider
Arrange your unoccupied property insurance online through us here at Cover4LetProperty and you have the choice of cover that protects as much, or as little, as you choose.
This standalone insurance product may also typically provide cover for just as long as you need it – and unlike many other types of general insurance, may be purchased for periods of less than a year. If you are going to be away for just three or six months, for instance, your unoccupied property insurance may be bought for only that period.
This might be one of your options if the reasons for the property being empty are because it is undergoing building works, for example.
As you would before buying any other type of home insurance, carefully compare empty property insurance and all its variations – and you are likely to find that here at Cover4LetProperty we offer expert, specialist advice on competitively priced policies.
Further reading: Guide to Unoccupied Property