If
you are investing in property you will want to make
sure that your investment is as safe as it can be.
When a property becomes vacant or is unoccupied
there is a greater risk of damage occurring. It
is, therefore, vital to ensure that you have adequate
insurance protection in place that will pay out
a claim if you find yourself in a position where
you need to make one.
Landlord
Insurance
Under a standard landlord`s insurance policy you
will usually still have some cover if your property
becomes unoccupied. There may, however, be restrictions
or limitations on this cover, for example, malicious
damage or damage occurring from burst pipes may
become excluded under the policy terms and conditions.
You
may have to take some specific actions to ensure
that cover continues to operate. Many insurance
policies require that the water system is drained
down if the property is unoccupied for a period
of more than usually 30 days. In some instances
you may also be required to board the property up
or implement other security measures.
It
is also important to check your insurance policy
to establish whether you are required to notify
the insurer if a property becomes vacant as this
may be a requirement for cover to continue.
Unoccupied
Property Insurance
If you own property that is likely to be empty for
longer than 30 days then you may want to consider
an insurance policy that is specifically designed
for unoccupied properties. There are a number of
scenarios that can be covered under this specialist
cover. It may be that you are in between tenants,
will be carrying out renovations, or that your tenant
has had to temporarily vacate the property, for
example, because of a hospital stay.
Under
a good unoccupied property insurance policy
you will have cover for a full range of
perils that includes fire risks, malicious
damage and escape of water those that are
usually limited under a standard landlord
policy if the property is unoccupied.
You
may have to pay a higher excess in the event
of a claim for these perils due to the higher
likelihood of them arising and increased
claims costs that are usual if a property
is unoccupied over the longer term.
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When
your property becomes occupied again you should
notify the insurer. You may be able to automatically
switch over to a standard landlord policy again
with the same insurer which will ensure that you
have no gaps in cover between policies.
If
you are a buy to let landlord or property investor
then there will be many actions that you already
take to protect your investment. Whether it is by
using a loans
calculator to work out affordability before
buying a new property or checking references for
new tenants, you will take a number of steps to
minimise risk. It is essential that you take the
same prudent approach to your insurance arrangements
if you wish to ensure that you have the best protection
in place.
