What if your commercial property or home is unoccupied?
A common issue arises when a building, whether a home or commercial, is unoccupied for an extended period. If for instance:
- You are travelling on an extended holiday
- You are moving away
- Or a tenant leaves your home or commercial building
and you find you can’t tenant or sell the property, make sure you consider what consequences this could have for your insurance. The Unoccupancy Clause is a frequent item in home and/or contents, landlords and business package policies. It is a general exclusion outlining that in the event your premises is vacant or unoccupied for a set amount of time, your policy cover may become restricted, or cease.
What is the Amount of Consecutive Days of Unoccupancy Allowed?
The time period required to trigger the unoccupancy clause varies significantly between insurers. Some may be as little as 30 days, others as generous as 100 days. Although our superior Steadfast wordings will typically include a clause of up to 90 consecutive days of unoccupancy, this can never be guaranteed and is only something you can find out from your PDS, your broker or insurer.
Your policy wording will detail what is excluded from cover once the number of unoccupied days is reached, and a typical wording for unoccupancy may say:
Unless We otherwise agree in writing, We will not pay for any loss or damage to Your Property Insured if the occurrence happens after Your Premises has been unoccupied for more than 90 consecutive days. This exclusion does not apply to damage caused by: a. lightning, earthquake, volcanic eruption, tsunami and subterranean fire; b. impact by road Vehicle or their loads, Animals, trees or branches, meteorite, Aircraft or other aerial devices or articles dropped from them, sonic boom or space debris, falling communication masts, towers, antennae or dishes, falling building or structures or parts thereof which do not belong to You; riots, civil commotions and strikes.
Clearly the most significant exclusions are fire, malicious damage, water or storm damage etc.
What If I Give My Insurer Notice of Unoccupancy?
Once an insurer receives notice of unoccupancy from you or your broker, your policy may be kept in place, but the insurer will likely reassess your risk and negotiate different terms and conditions, namely a higher excess. It’s always an idea to have a friend or family member regularly attend the premises, and ensure all gates, doors and windows are securely locked.
What If I Have a Strata Policy?
Generally strata policies don’t have the exclusion but they may apply a higher excess to unoccupied properties. If however, the premises are completely unoccupied, the insurer may choose to decline cover completely.
Ask An Expert
Every insurer will have different rules for unoccupancy and what is expected of you. Phone your Centrewest broker on 08 9349 7900 today if you need any clarification around your policy’s clause, time periods, coverage and notification requirements.