Matthew Ashton

Written by

Matthew Ashton

3 minute read

Updated 14th February 2024

Statistics published by the Ministry of Housing, Communities and Local Government say there are around 650,000 unoccupied (empty) homes in the UK (click here to see the article). That’s an incredible number and represents around 2.5% of all homes in the UK (there are around 27.8mil homes in the UK – click here to read more).

Lots of people in the UK need unoccupied home insurance but since it’s a specialised type of insurance they have no idea how much it costs to insure. It is time to break the silence and release the hidden formula.

Factors taken into consideration for the costing

An unoccupied underwriter will use the following to risk information to help calculate the cost of the insurance:

  • The buildings sum insured
  • The contents sum insured (if applicable)
  • The security in place at the property (IE, does it comply with minimum security)
  • If the property is boarded up or not
  • How long has the property been unoccupied for
  • The long-term intention of the property
  • If there are any renovation works ongoing or planned at the property
  • Usual household underwriting factors such as previous claims, flood area, subsidence area etc
  • The level of cover required

Three levels of cover for unoccupied homes

Like car insurance, unoccupied home insurance has three levels of cover, namely:

  • FLEE Only Cover: This covers the property against the perils of Fire, Lightning, Explosion and Earthquake (and Aircraft)
  • Level 1 Cover: This covers the property for everything you’d expect on a main home insurance policy excluding escape of water, malicious damage and theft or attempted theft
  • Level 2 Cover: This covers the property for everything you’d expect on a main home insurance policy

Each insurer might have nuances within the levels of cover above, but experience tells us you won’t go wrong with this table summary.

The Magic Formula

The High Value Home Insurance market tends to use a 10p per £1,000 rate for buildings insurance. In other words, if you require £250,000 of cover for your buildings, this should attract a base rate of £250 + IPT (12%). The table below uses this magic formula which will help you estimate costs. Please note, we have calculated the below costs on a worst case scenario, in other words, we wouldn’t expects costs to be higher than the magic formula (although, please note there is always the exception to the rule).

Rebuild value x 0.001 (10p rate) x 1.3 (level 2 loading) x 1.12 (IPT) + 50 (fee) = estimate cost

Ex. £100,000 x 0.001 x 1.3 x 1.12 + 50 = 195.60 estimate cost for level 2 cover

Costing Examples

CoverSum InsuredBase RateCover LoadingIPTStanhope FeeTotal Cost
FLEE Cover£250,000£2500%12%£50£330
Level 1 Cover£250,000£25015%12%£50£372
Level 2 Cover£250,000£25030%12%£50£414

Get a quote now

Your name(Required)

Hidden

What can I do to bring the costs down or what will make the cost increase?

  • Excess: You can increase your excess to bring the cost down (this is called a voluntary excess)
  • Contents cover: One of our providers includes £10,000 of contents cover at no extra cost for you. Others will charge a little extra for this
  • Risk discounts: Depending on a combination of risk factors, some insurers can offer discounts to the base rates to bring the overall costs down. The only way to find out about this would be to speak to a member of the Stanhope team.

There you go! You now have the numbers to work out an estimated cost from the comfort of your own computer. But don’t spread this secret… we don’t want everyone to know.

Another additional cost to consider is council tax. Read our guide to find out how much council tax will cost for your unoccupied property.

Written by Matthew Ashton

I started working in the insurance industry in 2004. Four years later, I left to focus on theological studies, working as a youth worker and then as a ministry director in Seattle, USA. When returning to the UK, I had an opportunity to work for the late Andrew Marchington. I joined his firm as a sales advisor when it had around ten staff members. Within three years, I was Head of Ops with a staff team of over 30 people. After a chance encounter in 2019 with Rachel Living and Will Cooper, I co-started Stanhope to build a high-value home, luxury watch, and jewellery broker synonymous with trust. I love being with Donna, my wife, and four kids when not working, cramming in the odd row, or running when I can. I am fortunate to love what I do and consider it a blessing to grow the Stanhope brand.

Matthew Ashton

More blog posts