Warning – no insurance cover on damage if property not let quickly?

by Readers Question

6 days ago

Warning – no insurance cover on damage if property not let quickly?

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Warning – no insurance cover on damage if property not let quickly?

I’ve not been able to find an article on this in the forums.

I have a few properties and I’ve unfortunately had to claim on one or two insurance policies in the past, usually for malicious damage done to them. I’ve just had one of the properties vandalised whilst trying to find a tenant for it.

The assessor has said that as the property has been “unoccupied” for over 30 days, the claim is rejected! For a landlord, I would think that it’s not unusual for a property to be vacant for 30 days or more – whether whilst doing renovations or simply whilst finding new tenants.

I’ve read on the insurance ombudsman’s site (http://www.financial-ombudsman.org.uk/publications/ombudsman-news/34/unoccupied_properties-34.htm ) that “unoccupied” is a vague term, which unless the policy gives a clear definition, it is possible that “the person who has legal title to a property may be regarded as the “occupier” even if they never live in the property and it is empty”, so the rejection of my claim may be unfair.

Anyone have any experience of making such a claim? Does anyone know of an insurer who offers more appropriate insurance cover for landlords whose properties don’t always have new tenants within 30 days of the previous ones leaving?

Many thanks

Colin

Comments

Jason McClean

6 days ago

Hi Colin

Most insurance policies will detail how long they will cover the property for while unoccupied. 30-45 days is typical. The terms of the contract will then tell you what happens if you go outside of those terms - in many cases it will revert to very basic cover FLEE - Fire/Lightning/Earthquake/Explosion.

If your property is going to be unoccupied for more than 30-days, then you should tell your insurer and they will give you any options they can access. You can turn to an unoccupied policy with full cover if needed.

The terms of unoccupancy are normally detailed well within insurance contracts, so check your docs before you do anything else.

You cannot start a new policy on an unoccupied property with a standard landlord policy - unless by special terms with your insurer. Unoccupied needs to start as unoccupied.

If I can help any further, do let me know.

jason@thehomeinsurer.co.uk or 01832-735388
Jason McClean

Ian Narbeth

5 days ago

Hi Colin
What does your policy actually say and what were the circumstances of the damage? As the article on the Ombudsman's site discusses, each case depends on its facts. There may be a significant difference between a property being refurbished with tradesman on site most days and a property waiting to be let which is visited for short viewings by prospective tenants a few times a week.

Jason McClean

5 days ago

Hi Colin,

Every policy will be different, so you need to read yours carefully.

We have a panel of insurers who will all have slightly different approaches to unoccupied properties and detail in their terms/schedule how they will deal with it.

I think a proper unoccupied policy is worth going for rather than depending on a landlord policy to cover you if you go outside of terms. But everything should be in writing to you and if you read it then it will explain exactly what is covered or not. Failing that, call your broker/insurer and ask them, they want you to know the terms so you have the correct cover in place.

Hope this helps.

Graham Bowcock

5 days ago

Dear Colin
I have this concern from time to time. Most portfolio insurances cover up to 60 days; usually it is the cover that changes, not that there is no cover at all.

I currently have a house on a portfolio policy that is being refurbished for sale and I have made the broker aware of this situation. They will review after 60 days and ensure we have some cover for this situation (unoccupied cover).

As an aside, one of the properties we manage had a flood after the tenant had vacated early and not returned the keys. The insurance policy (a proper portfolio policy) was great and paid out in full, including rent, on the basis that from the landlord's point of view the tenancy was still in place and the landlord had not received the keys back.

Graham

Annie Landlord

5 days ago

My portfolio insurance covers 60 days unoccupied, but a quick call to insurer doesn't go amiss. When I decided to sell a property, following an eviction I had to to take out a special vacant property policy. My portfolio insurer wouldn't insure it as it was no longer going to be let.

Jason McClean

5 days ago

I would always encourage you to speak with your broker or insurer to make sure you are handling any change correctly and under cover as you expect. Doesn't take 5-mins and you will have it confirmed.

Hi All and thanks for your responses. (I had set up my query to notify me when a response is received but I haven't received any notifications, so I thought there were no responses!)

Thinking about previous claims, I guess the vandalism/thefts occurred either whilst the property was still tenanted or within 30 days of it being vacated.

My insurance is a block policy through Discount Insurance, Property 118's recommended supplier. Only as a result of this claim for damage being refused did it become clear that each property in the "block" is with a different insurer, and each have their own Ts&Cs. The policies are all very confusing as unoccupancy is mentioned and separately "vacant or disused" is mentioned. Only by focussing on the "unoccupied" trail have I picked up the expression "vacant or disused"; meaning unoccupied, untenanted or not actively used for a period of more than 30 days. Under General Conditions in the Key Facts document it just says "Unoccupancy". In Exclusions it just says "various exclusions apply to vacant or disused premises".

Under Unoccupancy, the policy says that after 20 days , to do things such as turn off water and electricity and to inspect the property weekly. The policy then uses the separate expression "vacant or disused", and from my reading, it appears that under this, only the FLEE things you mention, are covered. So I guess it is as you say, only covered for the first 30 days, but not easy to spot.

I hadn't looked at the property becoming vacant between tenancies as a change in the circumstances; the very nature of rental properties would incur periods when it is vacant between tenancies, and I would think that being vacant for over 30 days was very commonplace. Having to track when each property is coming to its 30 day deadline and then to make provision for when the deadline is reached, seems very arduous and I'm surprised that ongoing damage cover isn't standard in every landlord insurance policy.

I have another property that has just been refurbished following malicious damage so clearly I will have to obtain separate cover if it's not tenanted within 30 days of completion of the works?

Ian, it appears that someone broke into the property (back window smashed) and stole the boiler, trashed the kitchen, stripped the property of copper pipe - removing radiators off the walls and lifting floorboards to get at the pipes.

Graham, you're right in that it's not no cover at all under the policy, it's that it appears there's no vandalism cover after 30 days. I too have always had successful claims which is why this one has taken me by surprise and I don't recall the need to inform the broker when a property is still vacant after 30 days of not finding a new tenant.

Jason McClean

4 days ago

Hi Colin

Good to talk just now, hope it was useful and you have my number if I can assist any further.

John Walker

4 days ago

Does the term 'vacant' apply to individual flats in a converted property? I am just renewing my properties' insurance with Discount Insurance and need to clarify the position in my mind. All my properties are self-contained flats in what were originally larger houses.

Jason McClean

4 days ago

Hi John

Ask Discount direct, that's the best advice I can give you.

If I can help, I have a block of flats offering that does not apply unoccupied terms if half or more of the flats are occupied. Let me know if I can help further.

Jason
01832-735388

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