2020 has shaken the UK property market to its foundations. COVID left an unprecedented number of residential and commercial landlords with empty properties and in need of unoccupied property insurance to address the risks this brings. Lockdown forced tens of thousands of UK businesses to close and revealed to many office-based firms that working remotely wasn’t only possible but desirable. With the Chartered Institute of Personnel and Development (CIPD) predicting that the number of people permanently working remotely will double to 37% in 2020, it seems likely that more and more commercial property owners will be left with empty buildings. Coming to a market where 82% of properties are currently underinsured, this is a fresh headache no-one needs.
In the short-medium then it looks likely that empty buildings are likely to become a fact of life for many. These bring a particular set of risks and while these can be covered by unoccupied property insurance, there are actions that property owners can take to keep them safe and to reduce their policy premiums. To guide you as to how to do just that, in this latest blog from Coversure – the home of property insurance – we’ll help you get the right cover, offer some simple tips on keeping your property safe and a few industry insider’s tips on cutting the cost of cover.
Why Do You Need Unoccupied Property Insurance?
When a building becomes vacant for a period of time – and this can be a little as 14 days – standard cover can be reduced or even expire. This is because from an insurers’ perspective, an empty property is a risky property. As anyone who has moved into a house which has been left standing empty for more than a few weeks will know, they quickly start to show signs of abandonment and neglect. Commercial properties are no different and if left vacant can soon become susceptible to:
• Burglary and theft
In the case of flood and fire, being empty means that it can take longer for the alarm to be raised and the resulting damage worse. It’s for these reasons that you need specialist cover if your building is going to be empty for a prolonged period of time.
Unoccupied Property Policy Guide
Given the risks involved it’s important to ensure that you get sufficient cover, cover that gives you:
• Owners’ liability cover – in case someone is injured or their property damaged
• Storm cover
• Tempest and flood cover
• Escape of water or oil
• Theft or attempted theft protection
• Malicious damage protection
• Accidental breakage glass protection
• Double glazing cover protection
• Cover against subsidence
This type of cover can prove expensive – especially if your broker doesn’t have access to specialist schemes – so if you’d like to reduce your costs then we’d recommend:
• Shopping around – you may be surprised by how much cover prices can vary
• Using a specialist broker – by choosing a specialist such as Coversure you can get affordable, quality protection. We can also help you find cover that has flexible cancellation terms so you only pay for the time you actually need
• Deciding on what type of cover you need – buildings-only is cheaper, but for more comprehensive cover look to contents and buildings
• Making sure you have adequate cover – as we mentioned above, 82% of properties on the UK are underinsured. One of the main reasons for this is that their rebuild cost calculations (the amount it would cost to rebuild the property) are too low, something that can result in crippling loses in the event of a claim. A period of inoccupancy is a good time to get the relevant survey done as you won’t be disturbing your tenants. If you’re worried about underinsurance, then please contact your local Coversure office and they will be happy to help
How To Save On Cover
When taking out this type of policy you are likely to be asked to make reasonable efforts to ensure the building’s security while its empty. These will probably include regular inspections to guarantee its safety. In addition to this there are some easy ways to help cut the cost of unoccupied property insurance and reduce the chances of a claim:
• Upgrade security – improved door locks, key operated window locks, security lights and web-based alarms and CCTV are affordable and easy to install
• Employ guards – having a professional keeping an eye on things can really help reduce risks and costs
• Make it look lived in – collect mail, put lights on timers, go in and out at different times when doing inspections, keep heating systems ticking over and have people use any parking spaces
• Don’t have letting agent’s boards in the windows – nothing will say empty property as loudly as these
It seems likely that changing working habits, a COVID-prompted economic slowdown, shoppers’ increasing preferences for online and further local lockdowns will mean that unoccupied commercial properties will be an issue for some time to come. While many property experts are predicting that over the long-term commercial buildings such as offices and retail premises will have their usage changed and be converted into residential accommodation, this will take time. In cities such as Liverpool, London and Manchester we’ve already seen such a transformation as former waterside warehouses and mills have been turned into desirable living spaces. In accommodation-starved cities like Nottingham, we’re already seeing this is happening and it will help both property buyers and the city itself, but again this isn’t something that can be done overnight.
No, for the time being it looks like this is a problem that commercial landlords and property owners will have to deal with. Fortunately, independent help is available from your local Coversure office. Our brokers will be more than happy to give you all the advice you need on everything from getting unoccupied property cover to escaping the property underinsurance trap.
So, if you’d like some help protecting your property, then please contact your local Coversure office. They’re here to help and will do their utmost to ensure you can protect what matters to you.
The Coversure Team