Insurance for unoccupied home that will be demolished

Hello all - new entrant into this website so please be kind!

I recently purchased a property with an extremely old and rundown house on it, with the intention to eventually demolish it and rebuild. It was actually sold as unliveable in the contract (all the sinks have been ripped out, theres no kitchen etc).

Melbourne's been experiencing some pretty hectic storms recently and while I don't at all need property insurance for the actual home (in fact, I would love it if a well placed storm would knock over the house and save on demo costs), it's a two story home and there is some risk that if the house fell the wrong way, it could damage the properties next to it.

Considering all of that, I think all I want to insure it for is liability. I don't seem to be able to find liability insurance that is seperate from house or contents insurance, and it seems absurd to pay the hundreds of dollars each year when I'm not paying for the main function of the insurance.

Do I just need to bite the bullet and pay for home insurance? Or is there another option I can pursue? Thanks in advance!

 

If you got standard insurance and the house collapsed would the rebuild be funded by the insurance?

Or does the ‘unliveable’ part in the contract rule this out?

(Is the house structurally unsound (‘condemned’?) or it is it just unliveable because there are no sinks etc?)

 

Joynz I actually need to research the first part of your question - on the second, I havent gotten a property report but there are holes in the walls, the floor is rotting away etc. I didnt receive advice that it was structurally unsound on purchase however.

 

Why don't you just demolish?

 

The definition of ‘a kitchen’ is of interest in terms of the insurability question.

I have lived for extended periods cooking on a hot plate - and without a standard oven. Have always had a sink though. I never even considered my house uninsurable at those times or asked the insurance company as there was still a roof, toilet, walls etc.

It’s not uncommon for people to use the laundry or even bathroom to wash dishes while they are DIYing a kitchen reno. So technically no sink in the kitchen at that time.

 

The property being unoccupied would also likely invalidate the insurance.

 

No insurer has ever asked ‘does your kitchen have a sink?’ Or for that matter if it has a working bathroom.

There were a few days where there was no toilet - toilet had been removed and the floor was being relined before the new toilet was installed.

It seems odd that a house could slip into being uninsured in this type of temporary renovation situation.

 

An insurer will decline cover or a claim even if you took out a policy. They would see it as unoccupied and then go from there. Your neighbours would be first to tell the fire brigade and assessor it was unsafe and dilapdated and ready to collapse. Their insurers could even sue to recover their loss. Insurance assessors look at how NOT to pay before they approve any claim. Their reasoning is the property is not habitable and not what the policy covers. And even if it "could " have been they will argue you didnt tell them what they needed to know and would cancel the policy.

May be wise to accelerate demo plans based on safety. Insurers wont want to wear a risk if they know its a dilapidated state, vacant for squatters and could affect neighbours. Construction insurance is unlikely to be available for that risk as you arent a licensed builder.