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Unoccupied property insurance – What does it cover?

Unoccupied property insurance might, in some circumstances, be essential if you’re to protect your investment in your property and also potentially to comply with your mortgage agreement.

Below, we at GSI Insurance will explain some of the key characteristics of this type of cover.

Property status

Before looking at the insurance and possibly mortgage issues, it’s worth explaining how insurance providers see property in terms of occupancy:

  • occupied – the property is being lived in by you or your tenants in the case of landlord properties. In this context “occupied” means that it is being regularly used for purposes such as sleeping and day-to-day living.

If the tenants or owner-occupiers are not in residence, it’s only for a short duration of consecutive days, typically up to a maximum of 30-45 days as specified in your home insurance policy. That’s usually more than sufficient cover holidays and business trips etc;

  • unoccupied – a property with nobody in residence and where that situation has passed the maximum permitted number of consecutive days as outlined above.

The insurance implications

Once a property transitions to unoccupied status, whether that is intentional, unintentional or accidental (e.g. you’re delayed on a business trip), elements of your property cover may be at risk.

That’s’ because the risk profile of unoccupied properties is substantially different to those that are occupied. That’s particularly the case in areas such as burglary, vandalism, squatting and environmental damage such as leaking roofs going unnoticed after a storm.

If you wish to ensure continuity of cover, you will need to take out unoccupied property insurance.

Mortgage and other loan implications

Although not the main focus of this article, it’s worth mentioning that the occupancy status of your property might also have an impact on your mortgage or other loans secured on it.

Typically, your mortgage and such loan contracts will commit you to maintaining full property cover on the buildings at all time. If your insurance is at risk because your property has become unoccupied and you have not taken out appropriate cover, you might be in breach of contract with your funds provider.

What unoccupied insurance cover provides

Broadly speaking, this type of policy ensures continuity of cover for your property in its changed occupancy status. That includes the buildings and contents.

There are, however, some variations over standard home insurance policies:

  • adding unoccupied property insurance cover might typically mean you’ll be required to take some additional security measures. They might include minimum standards for locks and bolts, alarms and the need to get someone to periodically inspect your property;
  • you might also be required to take steps to ensure that any obviously visible signs of the unoccupied status are removed. Examples there might include removing accumulating post and keeping the grass cut / garden tidy;
  • in some cases, certain elements of your contents cover might be affected. You’ll need to check the specific wording of your policy on that.

Why this cover is separate

Insurers like to provide policyholders with as much choice as possible. They also avoid asking their clients to take out and pay for, unnecessary cover.

As a landlord or owner-occupier, your property might never be formally “unoccupied” and as such, you have no need for unoccupied property insurance cover. That’s why it and its associated costs, are not automatically included in standard household insurance policies.

You can find more detail on this type of cover here.


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