As an insurance broker, you may have clients who own various types of properties, from those they live in or rent out to vacation homes and even vacant properties. While all properties need insurance protection, vacant properties come with a specific set of risks. Vandalism, theft, and accidents such as burst pipes require costly repairs — keeping a property in shape is challenging when no one is there. Let’s discuss some of these risks and how excess and surplus insurance can mitigate any damages.
Unoccupied Property Risks
Vacant properties are prime targets for vandalism, theft, trespassing, accidents, natural disasters, and unauthorized occupancy. There are many ways to protect a vacant property, such as:
- Carrying out necessary repairs and maintenance promptly
- Hiring cleaners to clean the property regularly
- Ensuring the lawn and exterior are maintained and properly cared for
- Installing security systems
- Regularly checking that all alarms and security systems are functioning
- Monitoring for weather-related damage, pipe leaks, and other issues
Securing and protecting vacant properties is no easy task, and your clients deserve peace of mind. Even if they do all they can to avoid unwanted and costly outcomes, there’s still a chance that accidents can happen.
Specialized Coverage and Comprehensive Protection
Generally, empty or vacant property insurance covers damage caused by:
- Storms
- Fire
- Flooding
- Theft or attempted theft
- Oil or water from burst pipes
- Vandalism
- Impact from a car collision or falling object
Sometimes, it may even cover legal expenses (for example, if a homeowner requires legal proceedings to remove a squatter) and public liability (if a tree falls from the owner’s property onto the neighbor’s roof).
However, the unique and high risks associated with vacant properties mean that standard insurance is often inadequate for vacant properties, both in terms of coverage and claims amount available.
Some examples of standard exclusions are:
- Burglary through an unforced entry
- Renovation or building works-related damage
- Builder and contractor-related damage
- Damage due to poor maintenance
As such, you can offer clients excess liability insurance, providing additional coverage limits that complement their existing property insurance. Excess and surplus insurance covers policyholders with unique risks, extra high risks, or poor loss history who are not fully covered by traditional insurance policies.
As a broker, you can inform clients about this specialized coverage and how it goes beyond standard property insurance for vandalism, theft, fire, and natural disasters. It’s specialized even to cover accidents and injuries on vacant property.
Excess and Surplus Insurance Investment Protection
Vacant properties vary in terms of size, location, condition, and use. All these factors affect the coverage that traditional insurance will provide. So, if properties are unique and non-standard in some way, then traditional insurance may simply be inadequate for the property owners’ needs and wants.
Excess and surplus insurance can make up for this coverage gap. Beyond this, it can also aid in covering repair costs for damage caused by maintenance, weather phenomena, break-ins, and more.
Sufficient insurance forms a part of a multi-faceted plan to ensure that the property’s value is held for its future sale, rent, or further development, and in situations where a property is vacant, E&S insurance is critical.
Be sure to clarify with clients that E&S insurance is a separate policy they purchase and hold alongside their existing property policy (or policies). Furthermore, E&S insurance isn’t necessary for all vacant properties, so you must address each property and accompanying policies on a case-by-case basis.
Proactive Property Risk Management
The fear of things going awry is genuine for your clients with vacant properties, and for good reason. A property is a substantial, high-value investment. Its owners will do everything they can to keep it in good shape for many years to come, so a robust and well-rounded insurance plan must be a part of their repertoire.
About Cochrane & Company
For more than six decades, Cochrane & Company has been proudly at the forefront of the insurance industry. Our experience has enabled us to innovate in powerful ways, reimagining the E&S market and providing technology solutions that make it easy to do business with us. Licensed in all 50 states, we proudly serve clients across the nation, providing personalized and powerful solutions to help you become an even better partner for your clients. Speak to one of our experienced professionals today by calling (855) 967-0069.
