Guide To Unoccupied Property

A property does not need to be unfurnished to be classed as unoccupied. It can still be furnished but, if no one is living there for a pre-defined consecutive number of days, then, for insurance purposes, it is deemed unoccupied.

Empty buildings have insurance implications because:

some insurers will reduce the level of cover to the most basic of protection;
other insurers may even make your current policy with them invalid, meaning you will have no protection for your investment at all.

When does a property become officially unoccupied?

If you go away on holiday for a week, your property may remain empty. However, it is unlikely that your home insurance company will classify it as unoccupied.

Instead, insurers will often state in the policy details when exactly it becomes unoccupied for insurance purposes. This will typically be stated as a number of days that it remains continuously empty.

This often starts at 30 days, but it could also be as long as 45 days – it depends on the insurer. The amount of time that you can leave your property empty before your policy is affected can therefore vary.

This is one of the things that you may want to consider when you take out either a residential home insurance policy or, if you are a landlord, a let property insurance policy.

After this time period, your level of insurance may be reduced significantly, or it could become void completely. Again, this depends upon the insurer.

Who can be affected?

Any property owners could be affected by changes to their insurance policies due to their buildings being left empty for an extended period of time. This includes both landlords and other types of owners, who could be affected in various ways.

How landlords may be affected

There are various situations when landlords’ properties may remain unoccupied. These include:

when you are looking for tenants in between rental periods. Finding a suitable tenant is not always easy for landlords, and you may find that your search for the perfect tenant takes longer than a month;
when you renovate. You may have bought a building in need of work, perhaps from an auction. Or you may simply want to make some improvements following the end of a tenancy agreement.

Renovations, however, can often take many weeks, in which case your property could remain unoccupied.

How other property owners may be affected

As well as landlords, other property owners can also find themselves in a situation where their properties remain empty for an extended period of time. These may include:

you as an owner-occupier going on an extended holiday for longer than 30 or 45 consecutive days;
your job taking you away on business for an extended period;
you going through divorce proceedings and the marital home remaining empty while its sale goes through;
inheriting a probate property that you need to sell.

If there is a possibility that you could find yourself in any of these situations, you may well want to consider the option of buying unoccupied property insurance. You can always speak to your current insurer to see what options you have for empty property cover, or speak to a specialist such as ourselves.

Insuring your empty property

If you already have insurance for your property, you may be reluctant to take out another policy, thinking that it is more expense. Yet if you think about the risks an unoccupied property may face, making sure your investment is properly protected against the unexpected may help you sleep easier at night.

Risks faced by empty properties

Why do empty properties require more insurance in the first place? There are various risks that are deemed greater when a building is unoccupied. These can include:

a higher risk of theft. An empty home can be more tempting for a potential thief because they are unlikely to encounter resistance. Even if you take steps to reduce this risk, insurance companies will typically only consider the fact that it is empty and therefore requires appropriate insurance to cover the risk;
opportunists such as squatters moving in and damaging your property;
the risk of serious damage increases. Consider the example of a burst pipe, which you would likely spot fairly quickly if you were living in a property. If no one is around to spot the problem, however, the damage can end up being very severe, potentially costing a hefty sum to repair.

Unoccupied cover is an additional policy

While a standard buildings insurance policy allows for a window of unoccupancy (the aforementioned 30-45 consecutive days), you will need an additional policy if the property is going to be empty for longer than the window of time allowed.

Extended unoccupied cover – also called vacant property cover or empty property insurance – is something extra that you can invest in rather than being automatically included on a standard policy.

In most cases, you have the choice of whether you want to buy it or not.

Note, though, if you buy a property that will be unoccupied for a period of time after you exchange contracts and take ownership of it, specialist unoccupied property cover will be needed. If you have a mortgage on the property, then you will be obliged under the terms of the contract with the lender to make sure you have adequate buildings insurance in place – whether or not the property will be lived in straight away.

Short term cover

Short term unoccupied property cover is available should your property only be empty for several weeks or months. Typically, these policies are available for 3, 6, 9 or 12 months. You can choose the length of cover you need, then extend it if necessary.

For example, your empty property is up for sale and you take short term cover for 3 months. If it hasn’t sold within 3 months, you may be able to extend the cover for another 3 months, and so on.

Insurance could become invalid

If you do not take out extra cover, and your property stands empty for longer than the period stated within your current buildings insurance cover, you could find that any claim you make under the policy could be rejected by your insurer.

Insurance companies have very sophisticated methods of checking the status of a property when an event happened, so will know if a property was unoccupied at the time.

Renovation insurance

Renovation insurance is similar to unoccupied property cover, and essentially provides protection for when you are carrying out renovations and your building is empty.

The workers may cause damage during the renovation, and you may be able to get cover for structural and non-structural work, usually with an upper limit. You may also get liability cover as well as fire and theft cover included. These are typical things that are covered, but remember that every insurer is different.

There may also be exclusions. For example, renovation insurance may not cover the work being carried out, and subsidence cover is often not included if the work is structural.

If you do renovate, another thing to remember is that once the works are complete, it may be a good idea to revisit your buildings insurance policy. So, if you have added another room to the property, for example, or carried out extensive refurbishments, you may need to increase your sum insured.

Exclusions

Be aware of any exclusions within your empty property insurance. There could be limitations, for example, on how much cover is provided for the theft of any contents within the property.

Some insurers may exclude malicious damage cover or escape of water.

Your obligations under the policy

Also be aware of any conditions of your cover – such as the need to make regular checks on your property. Also note that in the event of a claim, if you are unable to accurately state the date something caused damage to your property, then it could be rejected. So, if there are heavy storms in the area where your property is, it may make sense to check on it the day after, for any damage. That way you can report it to your insurer in a timely manner.

You may also typically be obliged to make sure you keep the property well maintained. So, if your property is boarded up or dilapidated, it may be difficult to get cover.

Choosing your policy

If you do decide to purchase empty property cover in addition to your standard home or landlords insurance, do not just go with the cheapest cover – it may not be the most appropriate for your property.

Research various companies and look carefully over everything that is included in the price. Check that you understand any exclusions, so you can choose the cover that meets your needs.

Or seek the help of a specialist. At GSI Insurance, for example, we provide a wide range of policies covering different needs and can match you to the most cost-effective cover for your needs.

Whatever you decide, try not to rush your decision because it could prove to be significant should you ever need to make a claim.

Top tips on keeping your unoccupied property safe

Even if you take extra measures to care for your property while it is unoccupied, insurers will typically still demand that you have empty building cover in place. Your property is an important investment, and to reduce the risk of having to make a claim in the first place, there are certain steps that you can take.

While most of the following pointers below are common sense stuff, it is always good just to remind yourself of what you may need to do.

Property security tips

An empty property can sometimes be a more tempting proposition to a thief. Make it as hard as you can for an opportunist to break in by carrying out the following:

ensure that you have good locks on all of your doors and windows, including the garage and shed. It may be a simple step to take, but it can make a real difference. Also ensure that all windows are shut properly while you are away;
check to make sure you have no ladders around in plain sight;
install a high quality house alarm so that if anyone does try to break in, the neighbours will be alerted to the disturbance. It can also serve as an effective preventative measure;
if you do not want the expense of installing a house alarm, consider a “dummy” alarm bell box to act as a deterrent;
install movement activated security lights at the front and back of the building. These simple lights can put off potential thieves who would prefer to go about their work in the dark. You could also set lights inside the property to turn on at night, or even set a lamp to turn on and off every few hours to make it look like someone is inside;
another good preventative measure is to tidy up the garden while no one is present at the property. You could do this yourself by paying a weekly visit, or hire someone to do it for you. At the very least, ensure the lawn is mown and the hedges are trimmed. At the same time, keep the garden clear of any tools that could be used to break into the property;
you may want to remove the post on a regular basis to prevent it from building up. A pile of post or local newspapers sticking out of letterboxes is a clear sign to thieves that no one is at home, so either do it yourself if you are nearby or ask someone else to remove it for you;
if you are friendly with the neighbours, you could consider asking one of them to park their car in the drive to make it look like someone is home;
don’t blatantly advertise the fact that your property is empty. For example, if it is being advertised as “To Let” make sure no street name or number is given in any adverts;
read our blog post protecting an unoccupied property;
you can also forward calls from the landline to another phone that you own. A thief may call to see if anyone answers before breaking in, so this can be a good preventative measure.

Finally, visit The Met Police site for further in depth advice on how to protect your property from intruders.

Reduce the risk of damage

As well as the risk of theft, your property could also be at risk of damage if no one is there to spot problems. To reduce the risk:

set your gas central heating to “frost” in order to protect your pipes from freezing in the winter months;
check your property regularly, or ask someone else to check it for you. By taking a look over it regularly, you can spot problems as soon as they occur and fix them before they become worse. You may find that it is a condition of your empty property insurance cover that you make regular, logged checks on the property.

Summary

This guide provides the basics on what you need to know about empty properties and insuring them. If there is a chance that your property will remain empty for a period of 30-45 consecutive days or more either now or in the future, it could be a sensible consideration.

If you wish to find out more how we at GSI Insurance can help you access cost-effective and suitable insurance cover for your empty home, please feel free to get in touch for a no-obligation discussion.

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