Question: I have a residential investment property which currently is unlet. On renewing the insurance for the property I found it very difficult to get the full insurance I required. Is this common?
Answer: As you are aware from reading the newspapers there is quite a considerable amount of residential property in this country which is now vacant. The big freeze earlier this year also resulted in a substantial number of claims against insurance companies and it became apparent in processing these claims that many properties had not been occupied for some time.
Most property insurance policies contain exclusions of cover in situations where the property is left unoccupied for a given period of time. In many of these instances the cover is then reduced to fire only or sometimes cover can be excluded altogether. The reason behind such exclusions is that if the property is occupied when a problem arises it is more likely that the damage will be noticed at an earlier stage and the appropriate corrective action can be taken to minimise the extent of any damage or loss.
It is therefore essential that an insurer be informed as soon as the property is going to be vacant for any significant period of time. The same applies in relation to holiday homes although insurers will recognise that these types of properties will remain unoccupied for long periods, particularly during the winter. You may often find that these policies are subject to additional conditions, e.g. that the water mains is switched off and the plumbing system drained.
Insurers have a right to refuse cover if you fail to inform them of a material change in circumstances, i.e. the vacancy, or if you fail to comply with the conditions that may be a part of the policy. Given the potential cost of any damage to a property where pipes have frozen and then burst, you should be careful to check your policy wording carefully and make sure you do nothing which would affect your cover.
The information contained in this article is for general information purposes only and does not constitute legal or other professional advice. Specific legal advice should be sought on any particular matter.
