Posted on: October 26, 2020

COVID-19 shutdown: Check your unoccupancy clauses

Given the current climate, we want to make sure you prevent a breach of your current insurance cover, whether it be domestic or commercial. The global pandemic has led to business closures and travel restrictions, which has left many building unoccupied for the foreseeable.

If your current insurance policy has unoccupied or security conditions, you may be required to take weekly visits to the property, switching off gas or electricity and ensuring that your letterboxes are sealed. Many insurers are relaxing their unoccupancy clauses and policy requirements due to COVID-19, but you’ll need to double check to prevent any trouble.

Why do vacancy provisions exist?

Unoccupied homes and commercial properties present a greater insurance risk than occupied homes for a multitude of reasons. For example, it’s likely any major incidents such as a fire will have a slower emergency response time in an unoccupied property, causing greater damage. Not only this, but empty properties have an increased probability of a break-in occurring.

The amplified insurance risk associated with unoccupied and vacant properties has led to many insurance companies excluding these buildings in standard property insurance policies. As a result, owners who need coverage for an empty property may need to purchase unoccupied insurance.

Unoccupancy clauses for commercial property

If the outbreak has led to a shutdown of your commercial property, you need to be well-aware of your vacancy provision. Almost every commercial property policy has some variation of a vacancy or unoccupancy provision. What do these unoccupancy clauses say? Well, depending on your cover, most commercial property policies state that if the insured building is vacant for more than 30 days before an unexpected event occurs, there is no coverage from vandalism, water damage, building glass breakage, theft, or attempted theft.

Unoccupancy clauses for domestic property

Typical home-owners insurance policies won’t cover fire, vandalism, liability or other forms of claims on an unoccupied or vacant property. If you leave your home for a few months and there is a break-in, you might not be covered by your insurer, unless you have specific unoccupied and vacant home insurance. A holiday home, for example one that is usually listed on Stayz or Airbnb, that has been vacant for more than 60 days can put you at risk of breaching the property insurance. With the COVID-19 outbreak, Melburnians have been told not to visit second properties in regional Victoria since stay-at-home orders came into effect in July. Although some major insurers have announced more flexible conditions for people unable to visit holiday homes due to COVID-19 restrictions, you should still check-in with your insurer on whether this applies to you.

What can I do to prevent breaching my current insurance?

You need to check in with your insurance broker or property insurer to see if there have been any modifications made regarding your cover. Many insurers have adapted their policies in light of the current situation, but you’re better off confirming it just to be sure.

For advice about your situation or policy, contact us and we can assist you.


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