Who needs it?
Unoccupied property insurance is likely to be needed by a wide variety of individuals, for a number of reasons, such as:
- the home owner occupier who is called by his job to work away from home, or even abroad, for several months at a time;
- the home owner or buy to let landlord whose property is being remodelled or refurbished and which is temporarily unsuitable for occupation;
- the landlord who has seen the departure of tenants at the end of a lease and is waiting longer than usual for successors to move in;
- the owner of commercial property who has left the premises empty and unoccupied during refurbishment, refitting, or with tenants awaiting a new lease agreement; or
- individuals with an interest in a property which is subject to probate and remains unoccupied pending completion of that process.
Unoccupied property insurance is necessary because any type of standard property insurance – residential, buy to let or commercial – invariably has a cut-off point, so that after a given number of days that is has been unoccupied (typically 30-40, depending on the insurer) the cover becomes severely restricted or is considered to have lapsed altogether.
Insurers take this step because of the increased vulnerability of an empty property – from criminal activity or maintenance malfunctions – as described in a guide published by the British Institute of Facilities Management (BIFM).
What does it cover?
Very simply, unoccupied property insurance is designed to stand in the place of your regular property insurance, once the latter becomes restricted or lapses following a period of vacancy.
The cover may be tailored to suit your particular needs and the type and nature of the premises for which you want insurance cover to be restored.
So, this empty property insurance might be used to give basic protection that is little more than FLEEA cove – an acronym for fire, lightening, explosion, earthquake and aircraft – or a comprehensive level of cover that restores all the safeguards you enjoy when your home is in more or less continuous occupation.
In addition to the basic FLEEA, therefore, more comprehensive policies may extend to cover for such risks as:
- smoke damage;
- escape of water or oil;
- impacts from falling trees, branches, lampposts or telegraph poles;
- vandalism and malicious damage;
- loss or damage resulting from theft or attempted theft;
- replacing locks after any such break-in;
- accidental damage to cables, drains and underground pipework, drains and cables; and
- “trace and access” costs incurred when exposing damage to pipework or cables buried in walls or under floors.
Unoccupied property insurance also restores a further potentially vital element of cover needed by the property owner – property owner’s liability insurance. This gives you indemnity in claims that might be filed against you alleging negligence on your part as the property owner or landlord. Such negligence may be in breach of your duty of care towards visitors to the empty property (even those who have gained access illegally), your neighbours and members of the public.
If any of these individuals is injured or has their property damaged, you may be sued for very substantial damages. Therefore, property owner’s liability insurance typically provides cover of at least £1 million – and often a lot more.