Buildings insurance between exchange and completion

Quentin

See previous posts above on this - your solicitor has let you down, and shouldn't have allowed exchange to take place till the insurance is in place.

dacouch

cuthbei wrote: »

I found a broker today that really understood the situation. They advised me to call the vendor and ask him to call his insurance company to add me as "an interested party". His insurance company seem to think this will be fine and they won't even charge.

I'm not sure how my mortgage company will view this, but I'll be well insured anyway.

Of course, this won't work if the vendor cancels the policy, but that won't happen as he has a mortgage as well.

Thanks, Cuthbei

This might work but you would also need to ensure your mortgage companies name is also noted as an interested party. Have a word with your solicitor before you do anything as whatever you do it will have to be acceptable to them as they have to declare to the mortgage company suitable cover is in place that satisfies all their requirements (One of which is that the mortgage companies name is noted on the policy)

cuthbei

Hi,

Thanks for this. But my mortgage company won't be an interested party until it pays some money towards the house, which won't happen until completion. By that time I'll have a "normal" policy to cover buildings and content.

Am I missing something?

Thanks, Cuthbei

Quentin

Yes. If a disaster happens to the new house today, you will still have to complete, but you won't get your mortgage!

dacouch

Before you complete your solicitor has to send a declaration to the mortgage company that cover is in place and it satisfies all their requirements eg covers the right things and notes their name on the policy. Without this being sent to your mortgage company they will not release the money and you will not be able to complete.

cuthbei

So my plan is to get a policy as soon as one becomes available, I.e. 30 days before completion. The long gap between exchange and completion doesn't seem to work well. I won't be doing that again.

rainbird_2

Why is this so difficult? I apparently legally require buildings cover on a property I am buying between exchange of contracts and completion - a period of about three weeks. Surprisingly the insurer on my current property Prudential say they cannot help as their underwriters will not cover property until I am in residence. As I now need to look for a new insurer some others have also said they will not provide cover until I am in residence. Is my problem caused by the fact that I will not need a mortgage on the new property I wonder as I understand the lenders of those buying with a mortgage are helped by their lender to arrange buildings cover between exchange and completion. This situation must happen to hundreds of thousands of people a year so why is it so difficult? Anyway any solutions appreciated.

InsideInsurance

I have to say I would challenge it being a legal requirement for you to have it.

You could have a contractual obligation to have it either between you and the mortgage lender or between you and the seller but this is a different matter and one potentially for negotiation (though your unlikely to get anywhere with most high street lenders)