Being a landlord of an unoccupied property is a challenge many Australian landlords face at some stage. Whether it’s due to renovations, gaps between tenants or changing market conditions, properties can be empty for extended periods.
When this happens, it’s important to understand what insurance coverage you need. In this article, we’ll go over the key factors landlords need to consider when insuring their unoccupied properties.
Specialised Coverage in Australia
Standard landlord insurance policies in Australia have limitations when it comes to unoccupied properties. To obtain proper coverage, you’ll usually need to modify your policy. Australian insurers will require:
- Regular property inspections and documentation
- Maintenance of security systems
- Mail collection and general property upkeep
- Meeting specific utility management requirements
Failure to comply with these conditions can void your coverage, so it’s important to understand and follow your insurer’s unoccupied property requirements.
Time Limits and Vacancy Definitions
The length of time a property can be empty before it’s considered “unoccupied” varies between insurers. Industry standards in Australia generally define an unoccupied property as one that’s been empty for 60 consecutive days, though some providers may have shorter or longer timeframes.
The length of the vacancy also affects the coverage options. Insurers often categorise properties as:
- Transitioning between tenants (short term vacancy)
- Intentionally being left empty for an extended period (long term vacancy)
Understanding this is key to getting the right coverage for your property.
Important Considerations for Australian Landlords
Notification
Notify your insurer of the vacancy proactively. Most policies in Australia require notification within a certain timeframe and submission of required documents. Failure to notify your insurer properly can result in:
- Claims being denied
- Policies becoming invalid
- Gaps in coverage
- Policies being cancelled
The financial consequences of not notifying properly can be detrimental, leaving you out of pocket and exposed to big expenses.
Understanding the Elevated Risks
Unoccupied properties in Australia have higher risk exposures that need to be considered. Here are some key areas to look out for:
- Security and theft
- Ongoing maintenance challenges
- Unchecked weather damage
- Third party liability
Insurers take these elevated risks into account when determining coverage and pricing for unoccupied properties. Landlords need to understand how their unoccupied property’s risk profile affects their insurance needs in the Australian market.
Take Time to Research Different Coverages
Insuring an unoccupied property in Australia can cost more than a standard landlord policy. Premiums will be higher, and excesses will be greater. Some coverages may be limited or excluded.
Landlords should work with an insurance broker to understand the costs of insuring their unoccupied property. Comparing the costs and benefits of unoccupied property coverage against a standard policy will aid in risk management.
Key Takeaways
- Unoccupied properties require special insurance coverage and conditions under Australian regulations to maintain valid protection
- Most Australian insurers have specific vacancy timeframe limits that can affect or void your coverage if exceeded
- Vacant properties face significantly higher risks of vandalism, theft, and undetected maintenance issues compared to occupied properties
- Working with an insurance expert is essential to ensure proper coverage levels and compliance with policy requirements
- Regular property inspections and maintenance should be documented to satisfy insurance obligations for unoccupied properties
- Professional guidance helps navigate complex policy terms and ensures your investment remains fully protected during periods of vacancy