As time goes by, properties undergo various changes of occupancy. As they become unoccupied, insurers can feel that they are under greater risk of certain problems (like arson) & so it’s important that you inform your insurers of changes.
The worst situation for a property owner with an unoccupied property is in having a claim turned down. This article aims to prevent that problem & to present you with 9 tips to avoid property insurance pitfalls (instead of wasting time with a tenth tip, you can spend that time putting these tips into action). We hope the following article helps you:
How does an unoccupied property affect the insurance for landlords and developers?
Your buildings insurance policy has a requirement to inform the underwriters of material facts and unoccupancy is one such fact. Property renovation, buying a vacant property or having tenants leave a property will create a period of unoccupancy that may not be fully insured if it extends beyond 30 days.
I often hear landlords and property developers mention that their buildings are still furnished and visited regularly by their agents and they consider this as occupied. Be warned the insurance loss adjusters would probably have the opposite opinion and may reject your claims.
After thirty days of unoccupancy your insurers consider the building to be at greater risk of fire, mainly arson-related, but also include electrical faults in fixed wiring. The unoccupancy places the building at a greater risk to theft of contents, fixtures and fittings, vandalism, occupation by squatters and water damage due to inadequate maintenance, especially when routine site inspections aren’t carried out. One of our clients suffered repeated attacks with thieves targeting the copper electrical cabling in their abandoned factory until they completed our risk improvement programme.
Please note that property refurbishment, alterations and extensions to an unoccupied building need to be advised to insurance underwriters before works commence as this information may affect the acceptance of the risk or the extent of the insurance cover available. Insurers are often reluctant to provide cover if major structural and building works are to be undertaken.
What is the legal impact for landlords and developers?
The hazards associated with unoccupied buildings need to be adequately risk assessed to eliminate, reduce or control them. It is important to fulfil your legislative obligations under the Regulatory Reform (Fire Safety) Order 2005. You must also meet your responsibilities to minimise the risk of injury to third parties, including children who may use the site as a playground.
Please call us for our guide to making your property safe or taking a look at the Government’s fire safety guide.
How to insure an unoccupied property correctly
If your building is going to be left empty over 30 days or extended periods of time, you will need a dedicated unoccupied property insurance policy from Cornerstone Insurance. Most insurers will limit the cover to Fire, Aircraft, Lightning and Explosion damage only but at Cornerstone we can often provide Storm, Malicious, Theft/Attempted Theft, Subsidence and Flood damage dependent on location and prevention controls.
At Cornerstone we will discuss the best way to protect your property and market the risk with our partner insurers including Aviva, Axa, Abacus, NIG, Commercial Plus, Royal Sun Alliance and Gravity Underwriting.
Here is our top tips to protect your unoccupied building:
1. Neighbours – If your property is near a residential area, we recommend you enlist the help of friendly neighbours. You can ask them to report anything unusual to you, and to generally keep an eye on the place. Leave them your mobile telephone number and encourage them to call you with any problems you need to deal with. Tackling broken windows and doors quickly will help prevent further or more serious issues.
2. Waste removal – If your property is empty it is likely that waste of some form or another will build up around the building. Overgrown weeds, garden waste, fly tipping, general litter makes your property an advert for vandals, thieves and other intruders. Keeping a regular maintenance routine will help make your vacant building less obvious. We also suggest you seal up letter boxes or make regular collection of the post.
3. Locks – It sounds simple, but a recent survey of one of our clients vacant office buildings we spotted three windows that had been left open! It is important to make sure all of the windows and doors (including those of any garage or outbuilding) are securely locked. Our top tip is to screw the windows & non fire doors shut. We also recommend using heavy duty close shackle padlocks and multiple locks to create a visual deterrent to potential intruders.
4. Control – If you have tradesmen, agents and surveyors coming in and out of your property during its vacant period, keep track of who is entering and make sure you know how they have been given access. If keys are unaccounted for, or you want to control who has access in the future we recommend you change the locks on all access points of the building.
5. Clearing overgrown shrubs, can remove hiding places for potential intruders, however some thorny bushes may provide a natural barrier.
6. Warning Signage – even without a burglar alarm, putting associated warning signs in obvious places around your property could deter someone breaking into your property. Cornerstone have recently arranged for one of our clients sites to be surrounded by guarding and security patrol signage with a dramatic fall in reported trespassing. If the property you own is part of a construction site, adequate signage and demarcation is required by law.
7. Boarding up – sometimes the only way to keep intruders out is by boarding up windows and doors. Timber boarding is quick and relatively cheap but higher security protection can be gained from steel security screens.
8. Alarms – Signage on its own can deter but the installation of an alarm linked to a central control station will help alert you when a building is under attack. CCTV may help if its being constantly watched but in reality the monitoring station prioritises alarms and tends to refer back to footage after the event. The appearance of cameras can be a visual deterrent, any recordings of vandalism or theft could provide vital evidence should the matter be taken to court.
If you are unable to install CCTV or a mobile alarm system in your vacant property, it’s a good idea to pay attention to the local news for the area of your property. That way, should there be a significant number of break-ins occurring in the area, you will be able to take the appropriate measures to protect your own property before its too late. Also be aware that properties close to yours may have their own CCTV systems and finding out who manages these can you help you secure value evidence if a perpetrator has been recorded as they pass by.
9. Vacant property in a secluded or industrial area is best protected by security fencing. The choice of fencing is determined by your budget but wooden hoarding (often used for construction sites), heras fencing or even palisade and high security fencing often provides the best protection. Making it harder for intruders to get in helps deter opportunists by its visible presence.
Open space that needs protecting from fly-tippers and other intruders can be protected by concrete road barriers blocking vehicular access or alternatively plastic water filled barriers offer a lightweight and easy to handle alternative.
Cornerstone Property Protection Assistance
Our solution to your vacant property insurance comes in the form of partnerships both with you as our clients and the underwriters who appreciate our property protection review service to lower premiums and gain additional covers.
Call Tim Lee to discuss all of your building insurance requirements.