Properties FAQs
We've answered some of the questions we often get asked by brokers about our Properties cover.
The online questions allow you to enter a percentage for unoccupancy. Our definition of unoccupancy is:
- Unoccupied or;
- Empty or;
- Disused or;
- Unfurnished or;
- Untenanted or;
- No longer in active use
This applies to all premises.
In common with the rest of RSA, it is not within SME eTrade strategy to insure significant numbers of empty premises. Particularly where the unoccupancy is long term, or the building was already empty prior to taking out a policy with us.
We will accept a small amount of unoccupied premises as part of a portfolio of properties on one policy. They must not be in an adverse arson area, and have not suffered any claims relating to unoccupancy in the past.
As part of your duty to make a fair presentation of risk you should carry out a mid-term adjustment (MTA). This should be completed as soon as the premises, or any portion of it, becomes unoccupied. This ensures the correct occupancy details are noted and the correct premium is charged. This is important in the event of a claim.
A grace period is included in a policy (typically 45 days, but may be longer). This is before certain cover events are excluded. Excluded events are; Malicious Damage, Escape of Water, Theft, and Accidental Damage.
The policy wording will also apply to the Security and Inspection conditions after the grace period. This allows the customer time to comply with these important requirements, in order to maintain cover.
The system will generate a referral for this mid-term adjustment. You may be asked to provide additional information such as:
- Future plans for the premises
- Anticipated length of unoccupancy
- Are any new tenants lined up?
- Is any planning permission or renovation/refurbishment work taking place?
Depending on how the questions are answered, there may be restrictions to the cover.
When adding cover for residential premises, you must tell us:
- The type of residential tenant
- How the premises will be used
There is no question in the online journey which allows you to tell us who the tenancy agreement is between.
What RSA deems to be an acceptable residential tenancy:
- An assured tenancy with an initial period of at least 6 months or;
- An assured shorthold tenancy with an initial period of at least 6 months if the premises are in England or;
- An occupation contract with an initial period of at least 6 months if the premises are in Wales or;
- A short assured tenancy with an initial period of at least 6 months if the premises are in Scotland or;
- A private residential tenancy if the premises are in Scotland or;
- A regulated tenancy agreement or;
- A leasehold agreement with an initial period of at least 12 months or;
- An employee or;
- A family member
All tenancies must be arranged directly between the policyholder, or an agent acting on their behalf, and the tenant.
Residential tenancy agreements between the policyholder, or an agent acting on their behalf, and an organisation are not acceptable. Organisations may include a company, local authority or housing association.
Acceptable residential tenant types:
- Council support
- Leasehold
- Private rental
- Residential
- Students
- Non-working occupant(s), benefits assisted
- Non-working occupant(s), not benefits assisted
- Retired
- Working occupant(s), benefits assisted
- Working occupant(s), not benefits assisted
- Employee(s)
- Family member(s)
- D.S.S.
- People aged over 65
Please note: these may or may not be available, depending on which software house you are using.
The use of the residential premises by any of the above must be for residential purposes.
The only acceptable uses are:
- Private dwelling only
- House in multiple occupation
Some common scenarios are listed below along with our underwriting approach.
Is this tenant-type acceptable? No.
This is not to be mistaken for bedsits. A bed and breakfast obtains its income from short-term lettings of individual rooms. Income cannot be obtained from long-term property ownership and tenancies.
This tenant type is not acceptable, as it is neither a leasehold, assured shorthold or private residential tenancy.
Some software houses include AirBnB, internet lettings or similar in their list of tenancy types. The letting of an owners' property through these channels is the same as any other form of bed and breakfast. This includes whether breakfast or other meals are provided or not.
If the property owner derives their income from letting their property as a bed and breakfast, this is not suitable for a property owners policy.
Is this tenant-type acceptable? Maybe (see below).
This does not appear in the eTrade list of residential tenancies. However, this does not mean that quote requests cannot be submitted for this form of tenancy.
A bedsit, bedsitter, or bed-sitting room consists of a single room, per tenant, with all tenants sharing a bathroom. Bedsits are included in dwelling types referred to as houses in multiple occupation (HMO).
Bedsits are not to be mistaken for bed and breakfast providers, which are for shorter term lets and include the provision of meals.
Bedsits are generally formed from the subdivision of other dwellings but should not be mistaken for converted flats. A flat is a self-sufficient unit with all facilities, including washing/bathing and cooking, usually in separate rooms. A bedsit will generally not provide washing/bathing facilities within the room, and cooking methods may be limited.
If the tenancy meets the criteria for an acceptable residential tenancy, and all other eligibility criteria such as construction, claims experience and geo risk are acceptable, a quotation can be provided. The quote will be based on the most appropriate tenant type other than bed and breakfast.
Example | Response | Eligibility |
A house converted into 3 bedsits with a common bathroom, stairwell, and landings. All tenants have a 6-month AST. | Classify as Private Rental or Residential | Eligible |
A house converted into 3 self-contained flats, all with their own bathroom and kitchen, but common stairwell and landing. All occupants have a tenancy agreement of at least 6 months, and pay rent direct to the owner or their agents. | Classify as Private Rental or Residential | Eligible |
A house converted into 3 self-contained units, containing only a bedroom each, with a common bathroom, stairwell, and landing. All occupants pay a weekly rate that includes breakfast. | Classified as Bed and Breakfast | Ineligible |
Is this tenant-type acceptable? No.
A holiday home is a business that obtains its income from the short-term letting of individual rooms, or a whole house or flat. Income cannot be obtained from long-term property ownership or tenancies.
This tenant type is not acceptable, as it is neither a leasehold, assured shorthold or private residential tenancy.
If the property owner gains income from letting their property as a holiday home or similar, this is not suitable for a property owners policy.
Is this tenant-type acceptable? Maybe (see below).
We do accept HMOs. At present, it is not possible for us to record this on the Statement of Fact. We are working with software houses to rectify this.
HMO refers to residential properties where common areas exist and are shared by more than one tenancy within the property. Common areas are any shared areas, such as:
- Bathrooms
- Kitchens
- Stairwells
- Landings/hallways
HMOs are not the same as purpose-built blocks of flats. This is because an HMO will have originally been intended for sole occupancy, and was subsequently converted and/or sub divided.
There are differing rights for the various types of HMO tenant. Also, there is differing legislation and licensing that the landlord needs to comply with. This depends on whether they are subject to the Laws of England and Wales, or Scotland, or Northern Ireland. Failure to comply with these will constitute a breach of policy conditions, or give grounds for a claim.
Because of the different tenant types that can be considered as HMO, the specific tenancy and property type should be classified. The various available options will determine the eligibility.
Example | Response | Eligibility |
A house converted into 3 bedsits with a common bathroom, stairwell, and landings. All tenants have a 6-month assured shorthold tenancy (AST). | Classify as Private Rental or Residential. | Eligible |
A house converted into 3 self-contained bedrooms. Has a common bathroom, stairwell, and landing. All occupants pay a weekly rate that includes breakfast. | Classified as Bed and Breakfast. | Ineligible |
A maisonette converted into 2 self-contained bedrooms. Has a common bathroom, kitchen, living room, access, and gardens. All occupants are students and have a direct tenancy agreement with the landlord for 12 months. | Classify as Student. | Eligible |
An apartment (individual flat) in Scotland with 3 bedsits. Has a shared bathroom, access and living room occupied by persons placed by the local authority. They are the named party to a renewable 12-month tenancy. | Classify as Local Authority. | Ineligible |
Is this tenant-type acceptable? Maybe (see below).
Within the United Kingdom, there are 2 main forms of property ownership:
- The ownership of real property, including land and any buildings built upon it. Freehold interests in the property are transferable to heirs and assigns, and may be sold. Once sold, the previous owner, or freeholder, loses all rights to the property. The freeholder can let the property to others. This is usually done by granting a lease and creating a leasehold transfer
- One party buys the right to occupy land or a building for a given length of time. A leasehold estate can be bought and sold on the open market. The owner of the property, or lessor, will create the lease for a fixed period of time. This gives the tenant, or lessee, the right to occupy the estate. Until the end of the lease period the lessee has the right to remain in occupation as an assured tenant. They'll need to pay an agreed rent to the owner, as well as additional service or maintenance charges
Provided that the leasehold tenancy is for at least 12 months, this form of tenancy is acceptable.
Is this tenant-type acceptable? Maybe (see below).
This should only be used where all other tenant types do not apply. If the tenancy meets the criteria for an acceptable residential tenancy (above), these are acceptable.
Neither of these should be used if the tenant type is more accurately described by one of the other options.
Is this tenant-type acceptable? Maybe (see below).
This does not appear in the eTrade list of residential tenancies. Also, there isn't a consistent approach to whether the question is asked. This does not mean that we should not clarify our approach.
Residential tenancies should be:
- On the basis of a Private Residential Tenancy (PRT)
- Minimum 6-month Assured Shorthold Tenancy (AST) or;
- 12-month lease
- Occupied by the tenant and not sub-let
Any tenancy arrangement where the policyholder and occupant/s are not directly bound by a lease or tenancy contract constitutes a sub-let. For example, a freeholder of a property sells a leasehold interest to another party. That party then lets that property to a further third party. If the policy is issued in the name of the freeholder and the occupier of the property is tenant of the lessee, then that would constitute a sub-let.
Exceptions:
There are some exceptions to the above. If the policyholder is a residents' association, comprising of the owners of the individual flats within that block. Some of those owners may have chosen to let their individual flats out, or a block of flats owned by a management company.
In these situations, we do not deem this to be sub-let. This is because the tenant is under a tenancy contract with the notional owner of that flat, and issuing a policy is a matter of legal convenience.
If the policy is issued in the name of the leaseholder, then we have a direct link between the policyholder and the occupants. We would not deem that to be sub-letting either.
Risks:
The risks presented by the sub-letting of residential premises are the lack of enforcement of conditions with the tenant in residence. Also, remedies available for damage or eviction between the landlord and sub tenant.
In this scenario, the greatest risk is present where inadequate vetting takes place by the tenant of sub tenants. Alternatively, the use by the tenant to sub-let the premises for social housing with a local authority or other agency. As an insurer, we have no contractual relationship with the tenant in residence, nor the tenant of the landlord. Therefore, we cannot impose terms or make enquiries.
It is in the landlord's interest to ensure that sub-lets are not permitted. If they are permitted by the tenancy or lease, then the tenant must obtain consent from the landlord. Ideally, the landlord can stipulate the nature of sub-letting. Where this is not the case, we would ask you to bring the additional risks to your clients' attention, and suggest that they or their agents consider how best to reduce them.
If some form of control does exist, then there is no action. You may wish to record this and review whether the tenant type submitted represents the tenant or sub tenant.
For all sub-lets, you should draw the Statement of Fact and any requirements relating to residential letting and tenancy types to your clients' attention. Please advise them that we will not usually consider variation from these.
Is this tenant-type acceptable? Yes.
Student tenancies are acceptable subject to the usual eligibility criteria.
Because of the higher claims experience for this tenancy type, restrictions are applied. In addition, the standard cover for unoccupancy is amended to reflect the fact that it is more likely to be empty outside of term times.
The definition of Business in the policy wording states that the business must be conducted from premises based in:
- Great Britain or;
- Northern Ireland or;
- Channel Islands or;
- Isle of Man
This is not the risk address, but the Policyholder’s own address. If the policyholder isn't based within one of the above territories, the following may occur:
- Policyholders must comply with Security and Inspection of Unoccupied Buildings Policy Conditions. This can be difficult if not in one of the listed territories
- In the event of a claim, it could make it difficult to communicate with the policyholder
- The Law Applicable Policy Condition would be difficult to enforce
For the above reasons, these risks are unacceptable to RSA.
This depends on your software house, premises type and which version of the Properties product that you are using.
The Properties product is intended for those wanting rental return from long-term property ownership and tenancies. It is therefore not suitable for those owners of residential premises that also occupy most or all of the property.
To ensure this is complied with, the definition of Business will not permit more than 50% of any one residential premises insured to be occupied by the property owner.
Please note: Where the customer is in the name of a residents' association, we will not deem the premises to be owner occupied. This is unless any one member, or director of the association, occupies and owns more than 50% of that premises.
Commercial premises that are owned by the parent, subsidiary or pension fund of the policyholder are acceptable without referral to RSA. This is provided that the entity of the policyholder, and the entity of the trade occupying the property, are different. Also, the tenancy must be on a traditional commercial basis where a rent is paid.
We accept most types of Listed Buildings. A clause will be added to the policy schedule detailing conditions that must be adhered to in order for cover to be unaffected.
We automatically provide cover for malicious damage and theft caused by the residents of any wholly or partially residential premises. The cover is included within the Policy wording.
We automatically provide Legionellosis cover for all quotations that include property owners' liability. This is up to £5 million or the property owners' liability limit of indemnity, whichever is the lesser.
The Electricity at Work Regulations 1989 state that electrical systems should be maintained “so far as is reasonably practicable” in a safe condition. The regulations do not specify how this is to be achieved but the accepted practice is to adhere to the Institution of Electrical Engineers Regulations for Electrical Installations. This can be otherwise known as IEE Regulations.
Where we deem that the type of premises is subject to the Regulations, we may make it a condition that the regulations are complied with. Otherwise, cover may be reduced.
We will assume that the customer:
- Does not hold any form of asbestos licence and;
- Carries out visual inspections of their property only and;
- Ensures that all asbestos contractors are appropriately licensed and insured
On RSA Online, for a commercial premises to be eligible, the heating must be able to comply with the RSA Heating Policy. This is defined as follows:
Heating in non-residential areas is via fixed heaters fuelled by oil, gas or electricity, or portable heaters fuelled by electricity with a concealed element. Use is restricted to office areas only.
Pressure jet heaters, open fires and stoves must not be used.
If oil or waste oil are stored, the tank must be contained within a bund with a capacity equivalent to 110% of the maximum capacity of the tank. Any waste oil heater must be registered with the appropriate local authority, licences held and it must be operated in accordance with the manufacturers instructions and specifications.
We do not have any heating eligibility criteria for wholly residential premises.
All forms of heating are acceptable within wholly-residential premises.
For commercial premises, we do not accept non-standard heating. Examples of non-standard heating includes:
- Open fires
- Pressure jet heaters
- Stoves
- Woodburners
The main reason we do not accept non-standard heating in commercial premises is because the Policyholder has no control over how the risk is managed on a daily basis by their tenant.
Fuel types such as Liquefied Natural Gas, Liquefied Petroleum Gas, paraffin, petrol and wood are also unacceptable.If the premises are both commercial and residential, only the heating within the commercial part of the premises needs to be disclosed. This will determine the eligibility of the type of heating. An example of this could be a shop with flats above, or commercial with flats above.
This depends on your software house and which version of the Properties product that you are using.
We will only provide contract works cover for modifications and minor works to the premises. This is where the customer is required by contract to arrange insurance cover. The original Contract Price must not exceed £100,000.
We exclude non-ferrous metals. We add a Contract Works Extension to all policy schedules. The extension is:
CWL003A- Contract Works Extension (£100,000)
This clause applies to Property Damage Insurance in this Policy.
The insurance in respect of Buildings extends to include Contract Works to the extent to which You have contracted to arrange cover.
Contract Price: £100,000
Excluding:
- As shown in the Schedule
- Any amount in excess of the Contract Price
- Non-ferrous metals
- Any Property which is otherwise insured
The meaning of Contract Works and Contract Price is included in 'Definitions - Words with Special Meanings'.
If the Contract Works are in excess of £100,000 then a full Contract Works or Contractors "All Risks" policy that includes damage to existing structures should be taken out.
This depends on which version of the Properties product that you are using.
We will exclude property damage to the buildings and liabilities arising from damage caused by illegal activities at any residential premises insured by the policy. This is unless, and in respect of, propagation or processing of controlled substances. In this case, additional requirements on vetting and inspections must be complied with.
The limit of liability is £25,000 for each claim.
We do not write risks that consist only of takeaway food trades. This includes:
- Premises where there are flats above a food risk
- Individual premises which have different commercial trades including takeaway food
We may consider risks where:
- The Declared Value of the premises with the takeaway food trade is £500,000 or less
The following trades are classed as takeaway food trades:
- Burger Bars
- Fast Food Delivery Service
- Fast Food Retailing
- Fish And Chip Shop
- Pizza Delivery
- Sandwich Bar
- Sandwich Delivery
- Take Away Food Retailer
- Take Away Food Retailer - Burger Bar
- Take Away Food Retailer - Chinese
- Take Away Food Retailer - Fried Chicken
- Take Away Food Retailer - Indian
- Take Away Food Retailer - Kebab
- Take Away Food Retailer - Other
- Take Away Food Supplier
Yes. If there are other eligible premises on the policy that do not include takeaway foods. The Declared Value of the premises with the takeaway food trade must be £500,000 or less. You can add more premises to the policy at any time.
Yes, the changes apply to all brokers.
No. We can manage our exposure on those products using a Kitchen Equipment Requirement. As the Policyholder on Properties risks is not in direct control of the operational risk, we are unable to add this requirement to the Properties policy.
This depends on your software house and which version of the Properties product that you are using.
The Properties product is intended for the owners of the building, or those with an insurable interest. Therefore, we deem the buildings cover to be mandatory. We would not wish to provide a quotation if this was not included. This applies to requests that only include contents and/or property owners' liability.
We will cover Landlords Contents and Loss of Rent for individual flats if the buildings are insured elsewhere.
Property Owners' Liability is not deemed a mandatory cover by the Industry standard for electronic trading. However, we believe that it is important cover for all landlords and owners of property to let. Therefore, it will be added to all quotations that we provide for a limit of £2 million. Other limits are available.
There is no question that exists in iMarket or on RSA Online to capture this information.
As part of our fair presentation of risk guarantee, this information does not have to be disclosed to us. All of these are acceptable.
Adding a note of interest, such as a bank interest, does not extend any rights under the policy to the interested party. Our policy wording already includes a General Interests extension.
General Interests:
'The interests of freeholders, lessees, underlessees, assignees and/or mortgagees of Buildings covered are noted in this insurance. This is subject to You disclosing their names to Us in the event of any claim arising.’
This should satisfy most requests to add specific notes of interest. They will only be considered under exceptional circumstances.
Risk referrals
All referrals will have unique circumstances. There are a number of common questions our underwriters will ask about the risk. If this information is gathered in advance, it can often save time when making the referral to us. This includes:
- Waste management
- Building maintenance
- Fire safety
- Smoking policy
- Storage of combustibles around premises including combustible materials
- Has the electrical installation been checked and certified within the last 5 years
Claims referrals
Depending on the circumstances and status of the claim, our underwriters will need to know:
- Brief circumstances of the claims
Whether any preventative measures have been taken to prevent re-occurrence
There is no question relating to Japanese Knotweed in the Properties product.
As our Buildings cover is for damage by specific causes, there is no cover for damage to the property caused by Japanese Knotweed. This is because any damage from the knotweed is likely to be gradual, occurring over time. This is specifically excluded under the policy in ‘What is not covered’ of the Any Other Accident peril:
"3 Damage caused by:
A) its own faulty or defective design or materials
B) inherent vice, latent defect, wear and tear, gradual deterioration or any gradually operating cause or;
C) faulty or defective workmanship by You or Your Employees but this shall not exclude subsequent damage which itself results from an insured Event."
Commercial premises with care home as tenant
We do write some commercial care homes on this product. We would not expect any residential tenant types to be added to the risk details, as we treat them as a commercial risk.
The trades available to select within the product depend on whether you access the product through a software house or RSA Online. The table below outlines our eligibility:
Commercial Occupant Trade | Eligibility |
| Care home | Eligible |
| Childrens' home | Ineligible |
| Convalescence home | Eligible |
| Mental home | Ineligible |
| Residential home | Eligible |
| Rest home | Eligible |
| Assisted living units | Eligible |
| Nursing home | Eligible |
Common care home characteristics are:
- Residents live in the premises, most often in their own room
- Organised activities for residents
- Common areas for eating and socialising
- Full-time staff look after the residents, but do not reside on the premises
For these situations, the most accurate premises type is likely to be one of the following:
- Commercial (Detached)
- Commercial (Semi Detached)
- Commercial (Terraced)
- Commercial (Other)
Often care homes are located in converted premises, which may formerly have been large houses or mansions. In these circumstances, the premises type should still reflect one of the above. This is because the premises will have undergone significant refurbishment and development. It will have needed to comply with local authority planning, building regulations and any relevant licences to run a care home establishment.
Residential premises with care and or support tenancies, or care home added as a commercial tenant
Our risk appetite is not to accept residential premises with care and support tenancies. This is because it is very unlikely to be a direct tenancy agreement between the landlord and the tenant. It is more likely to be between the landlord and an organisation.
If the premises are being used as a commercial care home, the risk details should be amended in line with the guidance above on commercial premises.
A trust is not a valid legal entity. Also, it is not uncommon for trusts to be in the same name as the person who occupies the premises. This means we should treat the end customer as a consumer and our product is not aimed at consumers.
We are not able to gather the information we would require through online questions to determine if the risk is acceptable. As such, we decline any risk where the Company Status is Trust or Trustees.
We do accept risks where Trust or Trustees may be used in the policyholder name, but a different Company Status has been used.