Empty property insurance is a subject that every householder should take seriously.

Just why that is the case is something we at GSI Insurance would like to explain below.

Definitions

To begin with, it’s necessary to spend a few seconds thinking about the occupancy status of a given property.

From an insurance perspective, the occupancy of a property can typically be categorised as coming under one of the following broad headings:

• owner-occupiers are in residence;
• occupied by tenants under a formal landlord letting system;
• unoccupied (including properties that are empty of furnishings);
• cannot be occupied due to being derelict or undergoing substantial renovation.

The concept of a property being “unoccupied” doesn’t include things such as residents being away for shorter durations on things such as holidays or business trips etc.

A typical property insurance policy will define a maximum number of consecutive days that the insured property can stand unoccupied and still be covered by the existing policy. That is usually somewhere between 30 and 45 consecutive days.

Once a property stands unoccupied for longer than the specified number of permitted consecutive days, standard household and property insurance cover may be at risk.

As a general rule, insurers don’t differentiate between a property being unoccupied and unfurnished or unoccupied and furnished. The terms “empty property insurance” and “unoccupied property insurance” are often used interchangeably.

Why that matters

It is generally accepted within the insurance industry that the risks associated with property increase once it becomes unoccupied.

That should be intuitively clear, given the acknowledged predisposition for thieves and vandals to target such properties in preference to those with occupants in them. In addition, properties without occupants tend to be at higher risk of things such as leaks or other household problems that go unnoticed and which may subsequently cause serious damage.

As part of a standard property policy, your insurance provider will have accepted these higher risks but only for a limited duration of time – that maximum number of specified consecutive days. Once your property remains unoccupied for longer than that, if you wish cover to continue, you will need to take steps to put a specific unoccupied property insurance policy in place.

Properties that are uninhabitable

A special case might be those properties that, as touched on above, are effectively uninhabitable for one reason or another.

In such cases, you may find that there is a specialist policy available of a type sometimes referred to as “renovation insurance”.

Discovery

The responsibility for ensuring that appropriate cover is in place always rests with the property’s owners.

It is worth remembering that the insurance provider may have no way of knowing that, at a given time, a property has moved into unoccupied status. If you wish to ensure that your cover remains fully in place, you must bring such to the attention of your insurer.

A related question sometimes arises to the effect “how would my insurer know in the event of a claim that my property was empty at the time?”

Although individual practices may vary from one company to another, it is relatively normal procedure for an insurance provider to check the occupancy status of a property at the time the event leading to the claim took place. They have some very sophisticated methods at their disposable to do so.

If you did not have unoccupied property insurance in place at the time the incident occurred leading to your claim, you should anticipate a strong possibility that your claim will be refused.

Please do not hesitate to contact us for further information.