Insurance risk if property is empty
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.
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 occupied because it was less likely that someone would break in or that the home would be damaged.
But reasons for properties being left empty included the house being on the market, between tenants, or the usual occupier was undergoing medical treatment.
He said policy-holders should check what their insurers’ definition of ‘‘unoccupied’’ was.
‘‘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.’’
Insurance Council chief executive Tim Grafton said the consequences of failing to keep an insurer informed could be ‘‘dire’’.
‘‘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.’’