Why you may need insurance for empty properties
Your first thought, if you are new to the buy to let property business, is that since tenants may be one of the principle risks to your property, you may not need to bother about insurance for empty properties.
If fact, nothing could be further from the truth.
Many of the risks that a buy to let property faces can arise whether or not you actually have any tenants at all.
For any building, insurance against the main risks (that the insurance industry calls ‘perils’) such as lightning, storms, fire, flood and earthquake may be highly desirable since the cost of repairs could be substantial.
The effect of the damage resulting from any of these perils may be more serious if the damage goes unnoticed though, which is why specific insurance for empty properties may be necessary.
Some examples of this might include:
- the water from a leaking pipe in time bringing the ceiling down;
- slates dislodged during a storm allowing extensive rain damage to develop.
If you add to this the probability that an empty property may be more at risk from break-ins by thieves and from vandalism, then you may be able to appreciate the insurance providers concerns.
A final point to consider is that even when empty, someone could suffer loss or injury, which could be directly attributable to your property.
They may decide to sue you for damages.
So not having public liability cover because you decided to economise on insurance while your property was unoccupied, may turn out to be a very expensive saving on your part – and don’t forget to add in legal costs to the cheques you could be writing.
In fact you may have to pay these even if you win.
What is an empty property?
Some buy to let insurance providers may stipulate that if your property is unoccupied for a period of 30 days or more for renovations or between tenants for example, then empty property insurance (also known as vacant property insurance) may be advisable.
Your buy to let property may be one of your most important assets. Insurance for empty properties may help prevent it becoming a liability