It’s all in the small print… October 01 2006
As it turned out our insurance policy had a clause in it that said that empty properties required the letterbox to be sealed. I’d never read the small print on the insurance policy and I had certainly never heard of this clause!
Since becoming a mortgage and insurance adviser I’ve seen similar clauses in almost every insurance policy and those that don’t contain the clause usually have other requirements such as weekly inspections of the property and removal of all junk mail and post from the letterbox area.
Now I’m not saying that insurance companies won’t pay up in the event of a similar claim but we are living proof that if they can find a way not to, especially on larger claims, that’s where they’ll use the small print.
Here’s typical advice you’ll find on an insurance website:-
“It is vital that your insurer is kept informed of the occupancy status of your property. The fact that a property has become unoccupied is a material fact, and must be disclosed to the insurer, or you may find that you do not have any cover at all.
Any fact which may affect an insurer’s view of a risk which is not disclosed to them may invalidate your policy completely. Once they have been advised, they may then decide to further restrict cover, or not to invite renewal of the policy at all.”
Here’s an example featured on the BBC;
In this case they simply didn’t have insurance that covered an empty property something I see all too often as an insurance broker and I know many investors particularly who have discovered they couldn’t claim for fire, theft or flood damage as their insurance didn’t cover an empty property.
The Fire Protection Association (FPA) estimates that fires, theft and malicious damage in empty premises causes losses in excess of £100m each year.