Why do houses become unoccupied?
There are a number of reasons why a property could become unoccupied. If you’re facing one of these situations, it might be worth changing your current insurance arrangements to a more specialist policy.
Why do houses become unoccupied?
Inheriting an unoccupied property
From time-to-time, a property can become unoccupied due to ill health. If a close family member moves into care, has to spend an extended period of time in hospital, or sadly passes away, then their home may be left empty as a result.
With unoccupied policies in particular, there are often options for 3, 6, 9 or 12 month policy periods. This allows increased flexibility depending on the individual circumstances, which can be helpful in situations like this where often the state of the property is “up in the air” with more pressing matters to be handled. Buying a 3 month policy is a good way to ensure the property is fully covered while the long-term future of the building is decided.
A property chain is created when a new home owner needs to sell their current property before they can purchase the new one. A delay at any point in the chain will have a knock-on effect to all of the other transactions, and means that everyone is held up in moving into their own property.
If you’re in a position where you can bypass this, maybe you already own the house you’re moving into, you’ve inherited a property, or you have enough capital to buy the house without needing your current property to sell, then you may be able to move straight away, leaving your property on the market to sell at a later date.
As a vast number of property transactions in the UK involve some kind of chain, the sale of your old house could be delayed by an issue somewhere further down the line, which may mean the house sits empty for months, even with a sale agreed.
Arranging comprehensive unoccupied property insurance helps protect a valuable asset while the sale completes.
Between Tenancies – Let Properties
Most landlords insurance policies allow up to 30 days before they consider a property to be unoccupied.
There may be certain circumstances where it isn’t possible to get a new tenant in during that time. If the previous tenants caused damage for example, it may take time for this to be repaired before the property can go back on the market. Delays in obtaining references, or credit checking can push back move-in dates, and if a local authority places benefits assisted tenants in your property, they may not have any available candidates for your home.
Landlords insurance policies will usually (but not always) allow some cover while unoccupied, usually restricted to fire, lightning, explosion, earthquake and aircraft (FLEA) cover only to allow for this, but if you rely on the income from rentals, the last thing you want is a major incident that you’re not covered for on a restricted policy eating into your profits.
Out of Season – Holiday Homes
Particularly in summer hotspots, owners of homes that they let out commercially may find that their business is pretty seasonal, and may have periods in the winter where they may not obtain a booking within a 30 day period.
If it’s only going to be a couple of days, and someone locally is checking the property regularly for you, then you may be fine with having a few days with limited cover, but if your diary of bookings has a gap of 2-3 months or more that may not be so favourable.
If this is likely to be the case, it is worth keeping this in mind when you’re making your decisions regarding insurance. Even if it’s more expensive to begin with, a policy that allows you to switch seamlessly between unoccupied and holiday home throughout the year may save you more in administration fees in the long run.
If you’re lucky enough to have family abroad, or own a second home in warmer climbs, you may choose to spend longer than 30 days at a time away from the UK.
This is more unusual as the property is your permanent, main home, and policies are less accommodating in general than say, a holiday let property, where the insurers expect to get gaps between occupancies. You will probably find that with a restrictive policy, the amount of cover you are actually getting is even further reduced.
Please note that unoccupied property insurance doesn’t include some of the cover you might want to have in place, such as cover for valuable items you leave behind (jewellery, watches etc.) or alternative accommodation (costs to arrange somewhere else to stay if your home is uninhabitable following a claim) so you are probably better arranging a policy that allows for extended unoccupancy instead.
Becoming particularly prominent again with COVID-19 related lockdowns in 2020, there are occasions when the nation as a whole can be impacted, particularly in regards to travel plans.
By the same token, a downturn in the economy, or a rise in unemployment may mean that the British public are unable to afford as many holidays as they would have liked.
On the flipside, if travel is restricted or finances tight, it may mean that holidaymakers choose to take their break in the UK rather than abroad, creating great opportunities for holiday rentals and properties advertised on AirBnB. We also have great deals available for holiday home insurance.
With all of these examples, you will probably find yourself wanting better cover than what your current arrangement would give you in times of unoccupancy. GSI Insurance Services (Southern) Ltd. are experts in dealing with unoccupied property insurance, but we also have other products that cater to every eventuality talked about above. Speaking to one of our experienced advisors will be the best way to get the right cover in the most cost-effective way. Give us a call on 0800 612 9376 or click “Get a Quote” to complete our online quote form.
Need some more information?
Why not read one of our other unoccupied property insurance guides?
- Unoccupied Property Insurance
- Inheriting an unoccupied home
- Why are unoccupied properties higher risk?
- 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