Vacant property insurance covers a building that nobody occupies and nobody is about to. The word vacant is used interchangeably with unoccupied by most UK insurers, though some reserve it for buildings that are also empty of contents and out of use rather than simply between occupiers. Either way the product is the same shape: shorter terms, a narrower peril list and a longer set of conditions.
Residential and commercial, insured the same way for different reasons
A vacant house is usually between owners or waiting on probate, and the exposure is water, theft and weather. A vacant commercial unit is usually between tenants, and the exposure adds metal theft, rates liability and, in some areas, unauthorised occupation. The wordings look similar; the security conditions and the inspection intervals are usually stricter on the commercial side.
Term lengths and why they are short
Three, six and twelve months, extendable. The short term matches the reality, which is that most vacancies end. It also lets the insurer re underwrite as the situation changes: a building empty for three months is a different proposition from the same building empty for two years, and the second will be priced accordingly.
The conditions, and who is going to do them
Inspections at stated intervals with a record kept, heating maintained or the system drained, post cleared, locks and boarding to specification, services isolated. The question nobody asks early enough is who is actually going to do these things. Where the owner is not local, arranging a managed inspection before buying the policy is what makes the conditions achievable rather than aspirational.
Ending it properly
When the building is sold, relet or reoccupied, the vacant policy should end and the right policy should start on the same day. Most insurers refund pro rata. The overlap or gap between the two policies is where owners who did everything else correctly lose money, so put the insurance on the completion checklist beside the keys and the meters.
Questions people ask about vacant property insurance
Is vacant the same as unoccupied?
For most UK insurers yes. A few reserve vacant for a building that is also empty of contents and out of use, and unoccupied for one that is simply between occupiers.
How much more does it cost?
Usually more than occupied cover, sometimes considerably, because there is nobody there to notice a leak or deter a thief. Short terms keep the total down.
Can I get cover for a derelict building?
It is harder and some insurers will not quote. Where they will, expect stricter security conditions, a narrower peril list and a higher excess.
What happens when it relets?
The vacant policy should end and a landlord or commercial property owners policy should start the same day. Most insurers refund the unused premium pro rata.