Unoccupied Property are you still insured?
A recent study from Gov UK stated that at any given time, around 635,000 homes lay empty in the UK. Over 278,000 have been vacant for more than six months.
Properties, unsold or unlet can be worrisome for landlords.
When a tenant vacates, it is a mission to begin to find new occupants. This process can take time, from finding the prospective tenants to vetting, credit checking, cleaning and preparing of the property. The pressure on finances, while a property is void, can be a financially crippling situation for some.
Insurance is often overlooked by landlords, that can compound period of financial uncertainty, to the point of economic disaster.
Insurance is something landlords tend to brush over, to hurry through and get out of the way as quickly as possible.
Insurance is there, the pillars of financial stability, to protect your assets when the unexpected happens.
The insurance policy gives you peace of mind that you are protected, from a massive bill for repairs. It is essential your lender is satisfied that their interests are protected too.
Standard landlord building insurance policies are not suitable for long periods of voids, especially when you are trying to find a new tenant. For most insurance policies, the length of unoccupancy must not exceed 30 days. Should it exceed the limit, your cover is likely to be invalid.
Why would your cover become invalid?
Consider the following situations:
- Your tenant has vacated, and you are still searching for a new tenant. There has been some rough weather and a significant amount of rain, which has caused a small leak in the roof tiles. Nobody has been to visit the property for a week. What could have been a small amount of carpet damage has now become a damp issue. This damp requires more extensive attention; dehumidifiers damp treatment.
- Your property becomes vacant in the winter, and the temperature causes pipework to freeze and burst. As no one is in residence, the loss may not be noticeable for two weeks. Something that could have been, mitigated earlier, if there had been a tenant in the property.
- Someone in the neighbourhood notices a removals van in the street. They see your tenants moving their belongings out of the property. A couple of weeks pass, and they notice no one else has moved in. Guessing the property is unoccupied, they break in, through the back door and use your empty property for unsociable behaviour.
- The worst alternative is, the vacancy is noticed by squatters, they take up residency in your property unlawfully. You must now go through the lengthy legal process to evict them.
The increased risk of situations like the above is, what can make an unoccupied property challenging to insure. What would the financial impact of these incidents be for you, if your Insurance is not valid? Are you in a position, to foot the bill, to repair the property and make good, so it is ready for new tenants?
30 Day Limited
Another factor, to take into account is; If you tell your Insurer, the property is likely to be unoccupied for more than 30 days. They are likely, to restrict your cover to named perils, most usually Fire, Lightening, Explosion and Aircraft cover only. In this instance the above scenarios are still not covered.
How can a landlord protect themselves?
This is where expertise is valuable.
Ramon International Insurance Brokers, are experts in advising you, of what to do, should your property become vacant. The measures you can take to mitigate any damage and to negotiate, with insurers, to provide you, with as much cover as possible. Ramon can arrange extended perils cover, and provide guides on managing the risk posed.
For most people, their properties are their most significant assets, so they must be safeguarded. Speak to the experts today at Ramon who can review your current arrangements and provide advice on the best course of action to take to protect your interests.
Ramon specialises in insurance for Ships, Yachts, Aeroplane or Building Insurance – Contact Ramon Insurance – Call Charlotte on 0207 369 5378 today to discuss your quotation.
Please note you have a duty to disclose all material facts prior to and throughout the duration of the insurance contract. A material fact is any information which would influence the judgement of an insurer in either fixing the premium or taking on the risk. Failure to do so may invalidate the cover and could affect your ability to make a claim. If you are unsure about disclosing any information, please contact us for guidance.
Date: 5th of March 2020