The Rural View – Unoccupied Houses

Thank you to Rural Insurance for providing us with an insight into unoccupied house insurance:

‘The first question that needs answering is ‘What is an unoccupied property?’. The answers to this can vary, but on an insurance policy there is usually a definition which will vary by insurer and by type of property.

At Rural Insurance, we define an unoccupied ‘private home’ as:

  • A home without sufficient furniture for day to day living purposes;

or

  • A home sufficiently furnished for day to day living purposes but has not been lived in by you or a person you have authorised for more than 60 days.

When a policy is classed as unoccupied, the cover on houses is automatically restricted. This means covers such as theft, malicious damage and burst pipes are excluded unless you have a special agreement from the insurers to continue these covers.

Residential farm properties may be unoccupied because they are on the market, empty between tenants or the owner has gone into hospital long-term. For whatever reason, it’s important to inform your broker about any unoccupied properties on your farm as this may influence the level of cover under your Farm Combined insurance policy.

If a building is in a poor state, then you must tell your insurers to discuss covers as poor condition may invalidate the insurance.

Due to their nature, unoccupied properties are more susceptible to malicious damage and theft by trespassers. They often become vulnerable to:

  • Arson;
  • The stripping of copper cabling and water services;
  • Removal of lead and architectural features;
  • Water ingress;
  • Burst pipes or
  • Malicious damage.

As a Farm insurance provider, we want to know many of the following questions. Questions may vary depending on the individual circumstances:

  • How long the property has been, and will be, unoccupied for?
  • What the future plans are for the property?
  • Location of the property in relation to the main risk address or to other occupied premises
  • What condition the property is in?
  • What regular checks, if any, are carried out on the property?
  • What security features are in place?
  • Is the electricity, gas and water turned off at the mains, is the water system drained or central heating left on a constant temperature?

These questions help us to paint a picture, enabling our underwriters to determine the level of risk associated with the property, and underwrite it accordingly.

We often see claims for water damage by burst pipes. This is particularly common in winter when the pipes freeze and the water tank hasn’t been drained. In this instance, your policy will exclude this cover unless you have agreed special terms to continue cover, however a condition might be to drain the water system or leave the heating on at a constant temperature in the property. In cases where maintenance of the property is not carried out, the property often becomes neglected which is why it’s important to understand the risks and how they can be mitigated.

Mitigating the risk

Here are some suggestions on how to protect your unoccupied property:

  • Secure the property – external locks;
  • Isolate and drain down all water services;
  • Isolate electrical and gas supplies;
  • Ensure keys are strictly controlled and kept locked away; and
  • Perform regular checks on the property.

What is it going to cost you?

Empty properties are always more expensive to insure simply because they are more vulnerable and more likely to be damaged than a property that’s lived in.

Costs to insure these will vary depending on how well the property is protected from risk.

PLEASE REMEMBER – If a property becomes unoccupied during the period of insurance its important you should notify your insurance broker as soon as you can. ‘