Why are unoccupied properties higher risk?
A big factor in how insurance companies set their pricing is based on the number and amount of claims they pay out. This is one way to determine how much risk they are taking on.
Why are unoccupied properties higher risk?
As unoccupied property insurance tends to be more expensive than a standard home insurance, or let property insurance for example, it is worth getting an understanding of why you’re being asked to pay more.
Often the best way to insure an unoccupied property is with a specialist unoccupied property insurance, which can include reduced cover, along with conditions or requirements to help keep the property safe.
While these conditions can be challenging to stick to in certain circumstances, they allow insurers to keep their level of risk under control, and offer a more cost-effective policy as a result.
The biggest risks tend to be theft, malicious damage, fire, and escape of water. Therefore the requirements tend to be connected to security, or plumbing, with regular inspections to make sure there are no problems that could get worse over time.
Unoccupied Property Security
If it becomes obvious that a building has been unoccupied for a period of time, it can become a target. This can include thieves, vandals, and squatters, who will feel a lot more confident about their chances of not being disturbed.
Properties can be left for months, sometimes even years, such as during a lengthy dispute over probate, an extended stay of the owner in a care home, where there is a chance of them being able to recover and return to their home, or over a large-scale renovation problem for example. Local criminals may watch the property over an extended period of time and get the information in most cases, but tell-tale signs, such as boarding over doors and windows, or building materials left in a driveway can speed up this process.
For this reason, insurers may ask you to make it as difficult as possible for anyone with malicious intent to gain access, by making it a requirement that all doors and windows be kept locked.
As well as this, you can expect to have an inspection requirement, usually once every one-to-two weeks. If a property is being observed, then showing that people are coming and going may be enough to convince criminals that the property is still in use.
If these requirements made by the insurer are not met, they may not pay out for a claim in the event of loss or damage.
Unoccupied Property Plumbing & Heating
As mentioned above, one of the major concerns with unoccupied properties comes from escape of water. In simple terms, if a leak appears in a property that is occupied almost every day, it can be isolated early-on and dealt with. In an unoccupied house, that water could be leaking for days, sometimes weeks (depending on how often the insurer asks for it to be inspected), causing substantially more damage as it does.
In the winter, pipes that have not been lagged (insulated) in particular can be prone to freezing, with the expansion of water in the pipes causing leaks, or even bursting.
One way to prevent this is to turn off water at the mains and drain the system. Not only is damage to pipes minimised, if there is no water in the system, there is nothing to leak out.
Another option suggested by the insurer is to maintain the central heating at 15 degrees centigrade. This ensures that the temperature of water in the system never drops to the point of freezing, but does still present more risk to the insurers than the first option, as circulating water can still escape by other means, such as a leak developing from normal wear and tear.
Some modern systems may have an anti-frost setting. Please note that this often maintains a temperature below 15 degrees centigrade, and may not meet the terms set out by the insurer. In this case it is worth double-checking with them before you accept a policy to make sure this is acceptable.
GSI Insurance Services (Southern) Ltd. have been dealing with unoccupied property insurance for long enough to understand the markets and the requirements the insurers put into place. While the conditions are usually similar, we can usually find some flexibility to suit your individual circumstances. Give us a call on 0800 612 9376 or click “Get a Quote” to complete our online form.
Need some more information?
Why not read one of our other unoccupied property insurance guides?
- Unoccupied Property Insurance
- Inheriting an unoccupied home
- Why do houses become unoccupied?
- Renovations and unoccupied properties
- Taking long holidays and unoccupied insurance
- Who needs unoccupied property insurance?
- What does unoccupied property insurance cover?
- Case Study – Bringing unoccupied homes in Manchester back into use
- Unoccupied Insurance Guide
- Unoccupied Insurance FAQs