Unoccupancy refers to a property that has been unoccupied for a specified continuous number of days.
It is a term mostly used by insurance companies when monitoring real estate policies that provide coverage for different types of insurable risk on property.
When a house for example, suffers from unoccupancy, insurers would deem that the risk of suffering losses increases exponentially.
This is because it would be susceptible to perils such as vandals, squatters, and people of mischief.
Therefore they often include unoccupancy clauses into insurance policies that give them the right to suspend, or even terminate insurance contracts should a property be left vacant without legitimate residents for an extended period of time.
There are no standard number of days unoccupied that insurers use as a barometer of unoccupancy. It can vary from insurer to insurer.
However, unoccupany is generally observed to be continuous vacancies of between 30 to 60 days.
If a policy states that a house would be categorized as unoccupied after a vacancy of 30 days, then it would have an unoccupany status from the 31st day of vacancy,
If a house that has fire insurance catches fire and is totally condemned, an insurer might refuse to pay the claims should it be found that unoccupany exist.
If there are residents in the house, the chances of arson is lower. Even in the event of fire, the presence of occupants could possibly put out the fire. Limiting losses incurred and prevent total loss.
And a house that looks deserted would sure appear like an easy target for burglars on the lookout for their next pay day.
The wordings of such terms should be stated in the policy contract.
Most home owners would not face this problem as the property would be used as their permanent home residence.
It would be odd indeed for an address to be a family’s place of residence, but no one is home for more than 60 days. Even an extended holiday would seldom exceed 20 days.
A unique situation might still arise if the household moves to a new house but have yet to sell the existing one.
This can possibly be due to an asking price that is too high or that it is a house in a location that simply has too little demand for.
It’s still not a common occurrence though.
However, landlords have to be careful as there is always a possibility that tenants have moved out of the rental property without informing the landlord due to bad relationships between them.
While a landlord might catch wind of it should a month’s rental be missing, sometimes tenants can pay for months in advance. Leaving landlords with prepaid rent.
So in this off situation, there is a chance that the property might be unoccupied without the landlord knowing about it.
The funny thing with insurance is that there are always going to be exclusions with every type of policy. And insurers would then sell policy to specifically cover these exclusions separately.
This is why there are actually special insurance policies that provide coverage for losses incurred on vacant or unoccupied property.
