The above question regarding empty property insurance may look simple but the reality can be a little complicated.
Let’s say at the outset that no brief article or blog can possibly be a substitute for an in-depth assessment of your specific circumstances. So, please do contact us for a discussion about your unique situation and let us take it from there.
However, the following points might prove to be useful as a general introduction.
Is your property empty or unoccupied?
A fundamental start point is that, from an insurance viewpoint, whether your property is ‘empty’ (as in the sense of being unfurnished) doesn’t really matter very much.
What is important is whether or not anyone is living in it. If nobody is, then the property is classified, typically, as being ‘unoccupied’. That’s a key point because to an insurance provider and indeed to the property’s owner, the risks associated with a property increase significantly once it’s unoccupied.
For example, typical landlord’s insurance will only provide cover for an unoccupied property for up to a specified period of around 30 consecutive days or perhaps a little more, depending upon the policy. So, your tenants going on holiday or short gaps in between lettings are not usually a problem.
However, once you pass the period of days outlined in the policy, your cover may cease unless you purchase unoccupied property insurance. That’s also sometimes referred to as empty property insurance but it’s the ‘unoccupied’ definition that counts.
Broadly speaking, the same considerations also typically apply to owner-occupier and commercial property policies.
Situations where you might need unoccupied cover
Here are just a few examples of situations where your cover might lapse due to your property being designated as ‘unoccupied’ and having passed the permitted number of days threshold:
- delays in finding new tenants / you’re let down at the last moment by tenants;
- you’ve decided to do some restoration or renovation work and you’ve moved out (or aren’t letting) until it’s finished;
- you’ve purchased a new property but there’s going to be substantial building work required before it’ll be fit to live in or let;
- you (or your tenants) are being sent abroad for 2-3 months on business;
- you’ve inherited a property from a relative and it’s on sale;
Another point worth noting is that this important insurance consideration doesn’t contain any reference to ‘fault’ or ‘intention’. Even if your property becomes unoccupied for reasons you couldn’t have foreseen or prevented, this condition will still apply.
If you are forced to make a property claim on a standard policy while the property was actually unoccupied, it may be rejected.
A background check on the property’s status is absolutely routine where claims are involved. Please accept our assurance that there is a very high probability that an insurance provider’s checks would pick up that your property was unoccupied at the time the incident took place.
Why this policy condition exists
Earlier on, we mentioned that the risks to a property increase when it’s unoccupied.
The policy provider will have calculated their premium based upon the status of your property as ‘occupied’ and if that changes, it’s perfectly understandable that they will wish to be informed so that they can change the type of cover provided.
What risks increase? Typically:
- property damage due to unnoticed / unrectified faults – with things such as water or gas leaks, electrical fires and cumulative weather damage all being high on the list.
This is not an area to take chances with.
If you think you property might stand unoccupied for more than the permitted number of days, it really would be advisable to talk to us without delay to arrange appropriate empty property insurance.
You can find a copy of our more detailed Guide to Unoccupied property here.