Timing of exchange/completion - buildings ins.

tazgirl

Quick query as getting to that very stressful 'everything happening at once then nothing happening at all' stage. We're arranging our own buildings insurance, which the mortgage company needs to see proof of before issuing the mortgage. They also said that we should have buildings insurance in place starting from the date of exchange, as from that point we're committed to the purchase even if the house is a smoking ruin. We're selling a flat, so don't have our own buildings cover at the mo.

Is it correct that it needs to be in place before exchange? Obviously, we've got an idea of when we're going to be exchanging, but don't want to be paying for something we don't need. Surely once we've exchanged we'll have a 'guaranteed' (in as much as it ever is) date to complete, I just arrange the ins in advance, but to start on that date and send a copy to the building soc so they'll release the funds?

nickinoo

Unless you are buying a new build then you need buildings insurance from the date of exchange (new builds are covered by the developer until completion).

£Ronnie

Well I never knew that.....have bought two houses in the past and didnt have insurance on them until completion!(Required mortgages for both.)

sunflower_2

i am arranging own insurance and mortgage company just sent me a declaration to sign, stating the house would be insured

as soon as i get a completion date i will ring insurance company, but as far as i am aware i dont have to provide any documents to the solicitor/mortgage company

Eels100

I'm at the same stage and the insurance is the only reason our completion date has been put back a week! Our mortgage lender insists on seeing the insurance schedule 7 days before they issue the money - but my solicitor tells me that not all lenders are so strict.

sunflower_2

thanks for info - i will try sort insurance out now just incase - cant afford any hold ups

pipee

Try asking your mortgage lender for insurance, some will give free cover between exchange and completion (HBOS do). This should also prevent delays.

tazgirl

Thanks guys, better get it sorted then! Think they're asking to see the paperwork because we've refused their buildings (and contents/life/PPI) cover (because it was about 3x the price of an independent quote...). I'm getting a discount for buying it online, so will get it sorted as soon as we've got a potential date to exchange! Still don't understand why the property wouldn't be covered by current owners buildings insurance between xchange and completion, but seems to be policy for lots of people so will get on with it!

pipee

The property probably would still be covered under the vendors existing insurance, but once you have exchanged contracts you are contracted to purchase that property therefore it's in your own interests to insure it, if it was to burn down you wouldn't want to rely on the vendor's insurance as she may be under insured.