What do you need to know when buying empty property cover?

Sep 14

Let’s examine some examples of situations that might result in you needing to consider empty property cover.

This is sometimes also known as “unoccupied property insurance” or variations thereof.

Unoccupied and insurance

When you’re letting a property, as a landlord, you’ll want to see it occupied for as high a percentage of the time as possible. That’s all about your income stream.

You’re almost certainly keen to protect your investment and reduce risks to your overall financial position. So, you’ll probably have some form of landlord insurance in place. If you haven’t – you should do something about it and fast!

The two streams of occupation and insurance come together here. That’s because typical landlord insurance is written on the basis of protecting occupied properties. A typical policy will cover properties that stand unoccupied but only up to a specified number of consecutive days (often 30-45).

After that period, if your property stays unoccupied, elements of your cover might be at risk unless you take action to protect yourself. The solution is typically to take out unoccupied property insurance.

Occupied, unoccupied and empty

It’s worth spending a minute or two thinking about definitions here because they may have significant insurance implications for you.

From an insurance viewpoint, there is typically no difference to the above position based upon whether your property is:

  • unoccupied but still furnished or;
  • unoccupied and completely empty.

The key word is “unoccupied” in both cases.

Of course, if your property is empty as well as unoccupied, then it might affect the nature of the unoccupied property insurance you look for. There wouldn’t seem to be any logic in insuring contents that don’t exist.

So, don’t think that just because your property is furnished that it’s also “occupied”. That would not be the case.

A slight variation

In some cases, your property might be both empty and not fit for occupation.

This would typically be found in situations where, for example, you were substantially renovating the property by updating the plumbing system or having electrical wiring services come in to re-wire the entire place. The risks associated with your property would be different from normal circumstances.

In that sort of situation, you could discuss special renovation insurance with your specialist provider of unoccupied property cover.

Points to look for

If you’re looking for unoccupied property cover, it would be worth also thinking about some of the following:

  • it may also oblige you to make periodic, logged, visits to check the property’s condition;
  • having some form of legal costs protection might be a sensible idea. That may or may not be wrapped up with public liability cover but even when empty, your property poses risks to you in a number of domains including that of legal action;
  • be certain that any conditions associated with cover can, in fact, be complied with in your unique situation. For example, requirements for external PIR lighting might conflict with local authority rules and lead to you being reported for “light nuisance”. Remember that signing-up to conditions you physically can’t meet, might mean you’re not achieving the protection you’d hoped for.

Contact a specialist provider of such cover for more detail.