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Insurance for Unoccupied Homes

Renters At Risk


Insurance for Unoccupied Homes

It’s estimated that there are about 700,000 empty properties in the UK and they can be unoccupied for a number of reasons. Some are awaiting sale or probate, others are being renovated, or in some cases the owner is in hospital or has moved into residential care.

While most home insurance policies will provide cover for periods of absence from the property, this is often limited to 30 consecutive days. So, if your property will be unoccupied for a longer period of time you will need a policy that specifically covers your absence and offers the right type and level of insurance protection.

Risks insured

Insurers see unoccupied properties as posing additional risks from perils such as fire and flood. This is because if the unexpected occurs, it’s unlikely to be discovered as quickly, potentially increasing the severity of the resulting claim. Empty properties are also more likely to be targeted by thieves, vandals and squatters.

Unoccupied property insurance policies cover a range of risks, including storm, flood, fire and theft. Property owner’s liability cover will also be included, so that if a slate blows off the roof and damages a neighbour’s conservatory, the policy would pay out. Policies can provide insurance for three, six, nine or twelve months. Cover can be purchased for both the building and its contents; however, most insurers will exclude personal and valuable items such as jewellery and works of art, photographic and video equipment, expecting these to be kept with the policyholder or in a separate secure location.

The cost of cover

This will depend on a number of factors such as the value of the property, its location, state of repair and the level of security in place. Regular visits will need to be made to check on the property; these can be carried out by the policyholder or owner, a friend, relative or managing agent.

Renters At Risk

Results of a recent poll1 conclude that almost five million people in the UK who rent their accommodation have no plans in place to pay for their rent if they become too ill to earn for three months or more.

Recent cuts to housing benefits could leave them further at risk. Head of Protection for Royal London Intermediary, Debbie Kennedy warned, “It would be bad enough to be taken ill, without the added anxiety of getting behind with the rent and facing possible eviction. Income protection may be more affordable than people realise and can provide a financial safety net and enable people to focus on getting better.”

Some of the statistics from the poll indicate:

  1. Over a third of renters in paid employment admitted they did not know how long they could survive (financially) if taken ill

  2. 60% said they could only survive on their savings for three months or less

  3. Only 7% of renters in paid employment have ever consulted a financial adviser

  4. The most common place people turn to for financial advice is their family and friends

  5. 53% would apply for state benefits initially, 47% would then take steps to reduce their household expenses

With estimates anticipating falling levels of home ownership and rising levels of private renting over the next decade, this is a growing concern. Take advice to find the most appropriate income protection option for your circumstances.

1 Royal London commissioned YouGov poll, 2016 6