A staggering 1 in 7 property owners in the UK leaves their abode empty for more than one month at a time. It is crucial to ensure that your insurance policy carries the right level of cover for unoccupied property.
Do you know how long you’re allowed to leave a property unoccupied before you risk invalidating your insurance cover?
Your existing building insurance probably allows for your property to be vacant for a specified number of days, usually 30, but if you need to leave it vacant for a period longer than that, you will need additional, unoccupied property insurance cover.
If you make a claim for an incident or damage that occurs outside this set period of vacancy, you’re likely to find your insurance is invalid and your claim will be refused.
It’s estimated that there are more than 200,000 unoccupied properties in the UK which run the risk of being under-insured.
Why do unoccupied properties need insurance?
Your property may be unoccupied because:
- You’re on extended travels
- You’re waiting for it to be sold
- It’s a second home
- The property is being renovated
- You’re between tenants
- The property is in probate
During these periods, premises are more susceptible to risk because they’re unattended. Damage, such as a leaking pipe, can also go unnoticed for longer periods.
When looking for unoccupied property insurance, you should consider the length of time it will be empty and any risks particular to that property, for example flooding if in a high-risk zone, any damage caused by workmen should be covered by their public liability and not the property insurance.
In general, however, your insurance should include cover for the following risks:
- Escape of water / burst pipes
- Storm or flood damage
- Smoke damage
In the current exceptional circumstances of Covid-19 lockdown some insurers will have a specific position on properties that have become vacant because of a lockdown closure order. We’ve provided an overview of some of these changes on our website but it’s also important to know the position of your insurer on lockdown to understand whether your unoccupied property is fully insured.
Avoiding under-insuring your unoccupied property
At Glowsure, we often see the terrible impact that under-insurance can have when policy holders don’t get the financial assistance they expected.
This is particularly devastating when there’s a need to rebuild a property because the costs are that much higher. When under-insured, insurers will apply the “average rule” which they apply to calculate your claim and, as our illustration of the average rule shows (see below), it can leave you with a substantial shortfall if you haven’t based your insurance cover on the cost of rebuilding a property.
A special offer from Glowsure
Glowsure offers specialist insurance support for shops and retail properties and we can help you find the right insurance, diligently reviewing terms, conditions and policy limitations and exclusions to help you avoid becoming underinsured.
We help our clients to decide the right level of insurance cover by discussing in detail their circumstances and understanding their specific needs. In addition, we also offer support for clients taking a new commercial property insurance policy with us.
If you’re a landlord of buy-to-let flats, a block of flats or you own a commercial property, until the end of June 2020 we will pay for a Rebuild Cost Assessment (usually £160 per property), giving you a RICS-regulated report explaining how much you should insure your property for to cover rebuild costs.
If you’d like to know more about this offer or how to avoid being underinsured, give us a call on 01730 239387 or send us a message.