Have you ever wondered about your insurance status if a property you own or have an interest in is temporarily unoccupied and stands empty for a while?
Depending on the circumstances, you might hardly give the question of insurance a second thought. But – as we'll explain – perhaps you should. An unoccupied property continues to need all the safeguards it enjoys in normal conditions – and is in even greater need of further protection when the premises stand vacant.
Let's look at why you might need some form of empty home insurance – or unoccupied property insurance, as it is more likely to be known among insurance providers.
The different reasons why a property may be unoccupied
Whether it's your home or a buy-to-let investment property, the dwelling is likely to be occupied for most of the time. But there may also be occasions when no one lives there from one day to the next, and the building may remain unoccupied for an extended period.
Examples of such circumstances include:
- your home or let property is undergoing renovation – with extensive building works that prevent its occupation for the duration;
- no one is living there pending its sale – in the process of moving house, you have moved into your new home while the sale of your former property is pending;
- you are lucky enough to be taking an extended holiday overseas – or an around-the-world cruise, perhaps;
- you have accepted a contract that requires you to work away from home for several months;
- there is a longer than usual interval between former tenants moving out of your buy to let property and the replacement tenancy beginning – in the meantime, there is a void, and the dwelling is unoccupied;
- the owner is in a care home, and the property stands empty; or
- you have a probate property.
These are probably the most common reasons a property remains unoccupied for longer than a few months or so – but there are others.
Why is empty home insurance needed in these circumstances?
When your property is empty for around a month or longer, insurers will typically consider it unoccupied. The interval before it becomes unoccupied varies from one insurer to another but is generally in the range of 30 to 60 days plus.
Once it is unoccupied, your property is exposed to more significant risks than when there is someone there continuously. For that reason, some insurers can reduce your cover to fire, lightning, explosions, and earthquakes (FLEE) or regard the usual cover to have lapsed.
The risks of theft, vandalism and escape of water become that much more significant when no one is there to spot the intrusion or raise the alarm before an otherwise routine maintenance problem – such as a dripping tap – can cause widespread water damage.
In a briefing for members of the Royal Institute of Chartered Surveyors (RICS), security experts, The VPS Group set out the seven main risks to which unoccupied property is vulnerable.
Because the risks are so different to when the premises are fully occupied, your regular home insurance or standard landlord insurance may prove inadequate and is unlikely to provide the cover you need.
What does unoccupied property cover?
Unoccupied property insurance is designed to restore the cover and protection your premises need even when they are temporarily unoccupied for longer than a month or so.
Therefore, the principal elements of any property insurance are generally restored. This includes cover for loss or damage to the structure and fabric of the building itself, its contents, and indemnity insurance against those third-party liabilities to which the owner may be exposed. (Claims alleging the owner's negligence resulting in injury or property damage suffered by visitors to the premises, neighbours, or passing members of the public.)
Be aware of your responsibilities under the cover
As with any form of insurance, your responsibility for mitigating the risk of loss or damage doesn't stop when you arrange insurance cover. Far from it, your insurer is entitled to request your cooperation in mitigating such losses – or, in the event of a claim, you might otherwise be considered responsible for "contributory negligence".
The measures you may be expected to take are only common-sense steps, such as arranging regular visits or inspecting the property to ensure that the unoccupied property remains safe and secure, removing apparent signs that the dwelling is unoccupied, or keeping the heating on in winter weather to prevent pipes from freezing.
Can I get short term empty property insurance?
One of the features of unoccupied property insurance is its flexibility – allowing you to arrange cover for just as long as you are likely to need it.
Unlike most other types of general insurance, unoccupied property insurance can be arranged for periods of less than the full 12 months. So, if you expect to be away or for your home to be empty for just three, six, or nine months, you can arrange short term policies for these durations.
If your property is unoccupied for longer than a month, the status of its continuing insurance may be the last thing on your mind, but it definitely shouldn't be.
The more considerable risks faced by your property can sometimes lapse the insurance, meaning that the property may not be covered while it is unoccupied. It's therefore useful to consider taking out unoccupied property insurance and checking with your current provider as to how this impacts your insurance.