16 April 2021

Cover to include with your unoccupied property insurance policy

By Joshua Meadowcroft Manager
Minimalist living room

Over the last few years, when it comes to insuring unoccupied properties, we have seen insurance premiums and excesses increase and cover reduce – with some insurers only covering the property for losses resulting from Fire, Lightning, Earthquake, Explosion and Aircraft damage. This can leave you without cover in the event of water damage, burglary or accident.  The realisation of which only becomes clear at the point of a claim, just when you need your insurance policy the most.

Here are some of the key concerns for insurers and the additional cover we look to find for unoccupied properties.

Escape of water

Escape of water damage costs insurers £1.8 million every day1, and this risk is magnified when a property is unoccupied. But what are the risks?

  • Pipes freezing – If a property is not maintained at a constant temperature, the risk of pipes freezing in the winter is much higher.
  • Complex and vast plumbing – Luxury properties have several bathrooms, underfloor heating, wet rooms and air conditioning along with supporting pump rooms. The significant piping required increases the chance of a potential leak at a property. In addition to this, there are the further costs of locating leaks and replacing expensive tiling and marbling – all of which an insurer will take into account.
  • Increased pressure on pipes – When properties are left unoccupied and the water shut down, upon return to the property the high start-up pressure can damage the pipes, causing water leaks.

Because of these risks an insurer may simply refuse to cover escape of water for your unoccupied property or insist that water leak detectors are installed at the property.  For more information on what type of water leak detector would suit your property and lifestyle, talk to us and we will refer you to one of our trusted advisors.

Theft 

Some burglars will target particular streets or properties. With an ever-increasing use of technology, burglars will identify property layouts and observe patterns so they know when a property will be unoccupied. This has been more recently seen with professional footballers.

To mitigate this risk, insurers may request the installation of central station intruder alarms and may even look for additional security such as CCTV or electric gates.

Claims not identified early 

Claims can become costlier if an incident is not identified early enough. This is particularly the case for Escape of Water claims where a small leak can cause a lot of damage before it is even noticed, and if a property is only being checked weekly or fortnightly it is likely to fall into this category.

With fire damage, if a smoke alarm goes off and it is not linked to a central monitoring station, it may go unnoticed by neighbours until significant damage has been done to your property.

Due to these risks an insurer could restrict cover on your unoccupied property and request regular property checks, as well as the installation of smoke detectors that are centrally monitored.

Subsidence cover

In certain parts of the UK, the risk of subsidence is incredibly high. This increased risk is mainly attributed to the clay soil the properties sit on.

Due to the higher risk of movement, there is an increased chance of a large claim for these properties, therefore insurers are more wary.

While certain risks are increased while a property is unoccupied such as Escape of Water, this is not the case with Subsidence, so it is important that this cover is included.

Flood cover

Unfortunately, stories of whole villages flooding and the devastation this causes to livelihoods is becoming a more regular occurrence. People often feel this will not happen to them, but we are seeing an increase in flood damage claims as a result of ‘surface run off’, particularly for urban properties with basements.

Due to this increased risk, insurers are being stricter when it comes to the flood cover they offer on certain properties – these are identified in detailed flood mapping which pinpoints the potential risk per property.

To assist clients in high flood areas, insurers and the Government created a join initiative called Flood Re to make sure that all residential property owners have access to flood cover.  We work with several insurers that can provide Flood Re cover.

However, it is also important to understand measures that can reduce flood damage, so any risk can be best presented to an insurer. These are either resistance or resilience measures. Resistance looks to reduce the risk of water entering a building, whereas resilience aims to reduce the damage it causes. Resistance can include flood doors, non-return valves and flood barriers. Resilience measures include installation of sump and pump systems and tiled flooring.

Terrorism cover

Some luxury properties, while lived in and used by individuals, are purchased in company names. This can be for several different reasons, however as standard, insurance policies in company names do not cover any damage caused by terrorism.

Following a series of terrorist incidents in the early 1990s, the insurance industry and the Government created a joint initiative to cover damage caused by terrorism called Pool Re. Several of the insurers we work with can extend cover to include terrorism cover for properties purchased in a company name.

Liability cover 

When it comes to Household Insurance, liability can often be forgotten. Most standard policies will cover the following:

  • Property Liability
  • Personal Liability
  • Employee Liability

When it comes to luxury properties, we know any claim is likely to involve a larger cost due to the size of property and quality of contents, but this is also the case with liability.

Luxury properties may employ a large team of staff such as gardeners, cleaners, estate managers and security to maintain the property. In our experience, owners of luxury properties can be targeted by third parties due to the expectation of a larger liability pay-out.

Most standard policies may only cover liability up to £2 million, but we have access to providers who can cover up to £20 million.

How Aston Lark can help you get the right cover

At Aston Lark we will relieve you of the complexity that goes with finding the right unoccupied property insurance, while never forgetting the importance of price.

By working closely with Security, Fire Protection, Water Leak Detectors and Property Management companies, we will support you in implementing the right risk management solutions.

If you require assistance with an unoccupied property or any aspect of your personal insurance, then please contact Aston Lark on 020 7543 2801.

Sources:
Association of British Insurers – Burst pipes and water leaks https://www.abi.org.uk/products-and-issues/choosing-the-right-insurance/home-insurance/burst-pipes-and-water-leaks/

Find out more about our Unoccupied Property Insurance

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