This piece is by Sarah Durkin, Director of Investigations, Woodgate & Clark
Probate delays; rental gaps; renovation projects; and second homes can result in properties left vacant well beyond the 30 or 60 days usually permitted under standard home insurance policies. Each year, as the cold weather sets in, we see a rise in escape of water claims and losses linked to frozen pipes. The big problem with vacant properties is that it can take time for the leak to be detected by which stage the damage could be significant.
Most household policies restrict cover and stipulate certain conditions if they know a property will be unoccupied for 30–60 consecutive days, even if it is furnished. Beyond that point, insurers commonly exclude or limit cover for escape of water; theft and malicious damage; as well as accidental damage.
Problems arise where property owners do not inform their insurers that the property is unoccupied and an escape of water occurs. In some cases, for example when a property owner has moved into a care home or the property is subject to probate and legal delays, home insurance is simply not top of mind for the owner or their family.
TYPICAL SECENARIOS
However, it has been known for some insureds to claim the property was occupied at the time of the loss when clearly it wasn’t being lived in.
Frozen pipe/ escape of water claims where occupancy-related fraud and misrepresentation commonly surface tend to include:
· heating switched off or set too low,
· no evidence of recent occupation,
· inconsistent utility usage,
· claims narratives that contradict physical findings.
Policy wordings can often be open to interpretation. “Unoccupied” can be taken to mean unfurnished or abandoned, rather than simply not lived in as a main residence. Standard household insurance policies also tend to dictate that the home is kept to a ‘reasonable living standard’. This can also leave room for interpretation – what one person may say is ‘reasonable’ in a claims scenario is often unacceptable to most other people, not least a claims professional.
Instead of buying cover for an unoccupied property insurance which tends to carry higher premiums and excesses, what we are increasingly seeing each winter is claims framed to fit standard occupied-home cover. In unoccupied homes, particularly where heating has been disabled, insurance cover would not apply and this is why policyholders are likely to misstate occupancy.
As a result, we are now often asked by our insurer customers to apply our investigative skills to these cases. It can be difficult evidencing occupancy without intrusive investigation. We look at heating and thermostat settings; utility usage patterns; maintenance and inspection records and local enquiries. In some instances, non-occupancy is glaringly obvious due to the lack of utilities – no fridge, oven, washing machine for example. But still, a claimant can argue this is their lifestyle.
Wider economic conditions are amplifying the risk. High energy costs in recent years result in heating being turned down low or off altogether.
To help address this annual challenge, it remains vital that insurers and brokers explain what “unoccupied” means in practice, flag notification obligations at inception and renewal and prompt conversations when clients’ circumstances change. Insurers, meanwhile, may need to revisit how vacancy conditions are communicated — particularly around seasonal risks such as frozen pipes.
Looking ahead
While the 30/60 rule is long-established, as long as financial pressures persist, occupancy concerns are likely to remain an issue. The key is balance – protecting the integrity of household portfolios while ensuring genuine customers are not caught out by misunderstood conditions. Clearer communication, consistent investigation standards and early engagement are essential to manage this evolving risk effectively — without eroding trust at the point it matters most.
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