Buyer has taken out insurance before contracts exchanged

dacouch

Patr100 wrote: »

But there's no real need to do it too early.
You can phone/search - get the best quote then once exchanged , a phone call/instant online application will put the policy into force in a matter of minutes so you'll be covered from then, with the relevant docs then sent on within a few days.

The only problem with this is the solicitor will normally require to see the building insurance on or before they exchange

chappers

There is no problem being insured twice , but to both claim would indeed be fraud.
I wouldn't worry about it , in theory once a period of double insurance has lapsed you could both claim half the premiums back, for the period of double insurance.

Patr100

dacouch wrote: »

The only problem with this is the solicitor will normally require to see the building insurance on or before they exchange

Not in my experence.
They will emphasise the need to have it in place after exchange when confirming exchange but none have ever required to see proof.
Why should they bother? it's my loss, or the mortgage Co (who usually insist on cover after exchange) , not theirs if it falls down and I haven't got it.

mariaadam

Hello,

I am qualified to sell insurance and this is not a problem at all and certainly not fraud. People shouldnt be scaring you like that, I net your under enough stress with a slow sale!

If they have already got insurance on your house then it makes no difference, they have probably just got the insurance sorted a little early or are super prepared! Maybe they got a special deal so took it out while they could.

With mortgage companies insisting you have insurance on exchange of contracts that refers to building insurance. You can purchase building and contents as 2 seperate policies so they probably just started a joint one. The reason the mortgage company wants buildings insurance is because of the following:

You ccontracts today, that means that you are legally bound to the buy the property, you set a completion date for next friday.
The house then burns down to a crisp tomorrow.....
You are still legally bound to buy!!! Your mortgage company wont be happy giving you the mortgage on a burnt down house....but they will have no choice neither.
Therefore....both the owner and buyer will have insurance on the property between exhcnage and completion....which resolves any insurance companies trying to get out of it. The two insurance companies then decided between themselves who will pay. Its not likely to ever happen but you have always got to be on the safe side.

Whoever was selling you insurance should have really explained this, I always do as it is definately one of the questions I get alot!


Hope this helps and good luck!

mariaadam

Patr100 wrote: »

Not in my experence.
They will emphasise the need to have it in place after exchange when confirming exchange but none have ever required to see proof.
Why should they bother? it's my loss, or the mortgage Co (who usually insist on cover after exchange) , not theirs if it falls down and I haven't got it.

I think you will find that a solicitor does need proof if they are doing it all by the book. In the mortgage offer copy that they get, it is their responsibility to confirm you have building insurance. Then, if you complete on the house and then cancel your building insurance, then the house falls down, your solicitor has covered themselves. See, soliciors do do a little bit of work haha!! They need to justify the large bill somehow

Patr100

mariaadam wrote: »

I think you will find that a solicitor does need proof if they are doing it all by the book. In the mortgage offer copy that they get, it is their responsibility to confirm you have building insurance. Then, if you complete on the house and then cancel your building insurance, then the house falls down, your solicitor has covered themselves. See, soliciors do do a little bit of work haha!! They need to justify the large bill somehow

I know what you say but as I said, I don't recall that being the case with my mortgaged purchase some time ago and certainly not with cash purchases by relatives much more recently and as I said, even if the solicitor doesn't insist on proof , the mortgage Co if involved, usually does asap when exchanged but not on cash purchases that I have ben involved in.
The solicitors only covered themsleves by mentioning the need in a letter before exchange or just after, so they can say they informed/instructed the client correctly if it all goes terribly wrong.