Unoccupied properties cause insurance headaches

Thursday, 19 October 2017

People who move out of their houses for a time could be left uninsured.

Households are being caught out by the fine print in insurance contracts that can leave them without cover if their houses are unoccupied for a period of time.

Insurance and Financial Services Ombudsman Karen Stevens' office has received complaints from people who have had their claims turned down because their properties were not occupied.

She said most insurance policies had a 60-day rule: Anyone who was away for longer than that would find their cover no longer applied. But most people were unaware of that condition, she said.

'When you're not going to be in the house for a period of time, you need to let your insurer know.'

* 'Comprehensive' policy did not cover cancelled trip's flights

* Insurance complaints continue to rise**

People who were living somewhere else, and coming and going from a property, could be caught, too, she said. Those who shifted out to paint or renovate could be affected.

Richard Godman, manager of technical underwriting, personal insurance, at Vero, said residential properties were safer when someone was living in them because it was less likely that someone would break in or that they would be damaged.

But sometimes when a house was on a market, a rental property was between tenants, or someone was having medical treatment, properties could be left empty,

He said policy-holders should check what their insurers' definition of 'unoccupied' was.

'Sometimes your cover will depend on whether the house is normally empty, or whether you usually live there but have been away for a while.'

He said sometimes there would be a higher excess for those who wanted cover for an unoccupied property, or extra conditions applied to the policy.

'If your home is considered 'unoccupied' there might be conditions that you need to meet to maintain your cover. Normally it's things you'd do anyway to keep the house secure - like locking your doors and windows, ensuring that your home is under regular supervision, or turning off the water mains – but it's important that you meet any specific terms like keeping your lawns tidy and clearing your mail.

'Anything you can do to make your home look lived in will help to protect it. You could even install timed lighting or ask a neighbour to park their car in your driveway.'

Tim Grafton, Insurance Council chief executive said it was not common for houses to be left empty.

'But the consequences can be dire if people don't tell their insurer beforehand. Every policy is different so we recommend people read their own policies but in general terms you should notify your insurer if your home is normally vacant, such as a holiday home, or even if you are moving out for a while, whether that be an extended holiday or for renovations for example.'