Whether you are a Landlord owning an extensive property portfolio or a single buy-to-let investment, you will know that insuring your property can be problematic if it becomes vacant for an extended period.
Exactly why is this a problem for Property Insurance Companies? What can you do about it to reduce your Landlord Insurance premiums?
When Does An Empty Property Become An Issue?
You should inform your insurer as soon as the property is vacated.
Still, most property insurers will only look to impose additional terms if a let property is unoccupied beyond either a 30 or 60-day timeframe.
This may mean that either more onerous policy conditions will be applied (restricted cover) or that the policy cannot be extended, and you need to purchase a specialist Unoccupied Property Insurance policy.
Why Are Vacant Properties Such a Problem For Insurers?
While the risk of break-in, squatting, and malicious damage all increase, the most common claim for unoccupied properties is leaks and through water damage from them.
According to the Association of British Insurers, water damage claims exceed £2.5 million a day!
As the property is vacant, claims can be significant, which not only impacts future premiums but also extends the unoccupancy period while repairs are undertaken.
How Can I Reduce The Risk?
The following basic activities will reduce the risk of claim:
- Inspect the property regularly (at least weekly)
- Turn-off stop cock to avoid water damage from burst pipes or leaks
- Set the heating to remain on a low setting will typically suffice (e.g. 10 degrees) to prevent frozen pipes, or you may find that your system has a frost setting.
Can I Get Professional Help To Reduce My Vacant Property Insurance Premium?
Insurance is not only about paying claims but also mitigating risk, and if you can demonstrate that your loss exposure has been reduced, then your insurer will reflect this in the premium charged.
Specialist products are available from companies such as Leaksafe, which are recognised by property insurers and brokers such as AXA, Hiscox and Insync.
Implementing leak detection and prevention solutions can lead to significantly cheaper, let property premiums.
Options to consider include:
- Wireless Water switch allowing the water supply to be disconnected quickly and easily
- Leak Detectors measuring the water flow which trigger supply cut-off if a leak is detected
- Flow protector – ideal for holiday lets where tenants may forget to switch off the water supply; the valve will monitor for inactivity and automatically turn off the supply.
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