Insurance is it on exchange or completion!!

cherry76 · 8 July 2009 at 9:13PM

Due to exchange soon. I have been thinking about buildings and contents insurance. When do I get the house insure. I read people said at exchange, surely the house is not mine yet and why should I insure ? It must be on completion which is not due for another 4 weeks. Thanks

Ian_W · 8 July 2009 at 9:26PM

cherry76 wrote: »

Due to exchange soon. I have been thinking about buildings and contents insurance. When do I get the house insure. I read people said at exchange, surely the house is not mine yet and why should I insure ? It must be on completion which is not due for another 4 weeks. Thanks

You don't need contents until you've got some in the house. However, solicitors advice to us has always been to insure the building from exchange because although, as you say, it's not yours - you are contractually bound to buy it on the completion date and will incur penalties if you don't.

A bit of a grey area requiring solicitors to err on the side of caution I expect. If you can sleep easily in the knowledge that you may be required to buy a burned out shell in 4 weeks - that the vendor hasn't insured either - Go for it! :eek:

superfran_uk · 8 July 2009 at 9:27PM

I asked this question and the resounding answer was on exchange. If something happens you're in a contract to purchase, so you really want to be covered. In reality it will cost you about £20 to have the insurance a month early - in the scheme of things, not a lot of money.

sandraslice · 8 July 2009 at 9:38PM

Ours will not exchange without a proof of policy...

picardygirl · 8 July 2009 at 9:49PM

I agree with buildings insurance on exchange, our solicitor required a copy of buildings insurance to enable them to do the exchange too.

superfran_uk · 8 July 2009 at 9:51PM

Buildings often comes with free or reduced contents, although you won't need it for 4 weeks it would probably be more expensive to set them up separately...

Sandra2 · 8 July 2009 at 10:01PM

We have had to provide proof of buildings insurance ready for exchange. Bit of a shock as we currently pay £323 for both and the new quote is for £799 and that includes a 15% reduction for new customers. It's because the house had subsidence work done 20 years ago which we had to declare so clearly we will spend the next 20 paying it back! Grr. Still, at least we have got to nearly exchange which after 13 weeks means we might actually move!

Richard_Webster · 9 July 2009 at 9:04AM

A lot of contracts for the sale of houses provide that the risk passes on exchange of contracts. The contract provides for the sale of the land and if the house on it burns down between exchange and completion you still have to complete the purchase - the land is still there - that's why the insurance is generally needed from exchange!

Hippychick · 9 July 2009 at 9:30AM

I once acted for someone who bought a house and between exchange and completion a huge tree fell onto the property and smashed the roof in.

The vendor had cancelled their insurance policy, had the buyer not put his insurance on risk at exchange he would have faced a really hefty bill!

so you must put it on risk from exchange, it will also be a condition of your mortgage.

Insurance is it on exchange or completion!!

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