Exchanged = Insurance Required

ABN

See a lot of posts re questions about house purchase and exchanging contracts etc. What I have not noticed is any questions or reference to insurance.

As far as I am aware once the contracts are exchanged you are committed to completing no matter what, else face large compensation claims. This means that should the house burn down, get flooded, roof blows off etc you still have to complete the purchase. Any claim will not br covered by the vendors insurance, as such it is your responsibility to insure the property as soon as contracts are exchanged.

Think this is correct but not sure how many are actually aware of it.

plane_boy2000

I was aware - it was a condition of my mortgage that I had to provide evidence to the lender before they would release the funds to complete.

silvercar

my solicitor reminded me when he phoned to tell me we had exchanged. He suggested we also keep the insurance going on our (then sold) current house, to avoid any possible problems.

pawpurrs

what I dont understand is the house will be doubly inusured for that period!

robwend

yes it will. i forgot to do mine<noone said nowt> i was awake all week worrying if the house will blow down

scousemanblue

pawpurrs wrote:

what I dont understand is the house will be doubly inusured for that period!

This is a bit of a grey area. It is adviseable to keep the property insured or put it on cover until you actually give up or get handed the keys whichever person you are in the chain.

santana-mx3

I was all ready to insure my new place on exchange but my solicitor told me not to do so until completion. I read the guidance notes from the firm and they seemed to back this up, saying that most contracts require that insurance is taken up at completion only but that some require it at exchange and to check the specific contracts. I checked mine and it definitely went with completion. I was quite surprised at that because all the comments I had read on this site in the past said that it was on exchange.

izoomzoom

My solicitors' guidance notes say the exact opposite. Insure for exchange because you are then liable.

Life assurance should also be from exchange, what does yours advise ?

nickinoo

We have just bought a new build & as were advised that we did not need insurance until completion as it was under the builders insurance then. I did actually ask the solicitor if we would have needed insurance at exchange had we had not been buying a new build & he said yes. We also kept the insurance running on our old house until we moved out even though our buyers had a policy too (at the end of the day we at least needed to cover the contents if nothing else).

barnaby-bear

santana-mx3 wrote:

I was all ready to insure my new place on exchange but my solicitor told me not to do so until completion. I read the guidance notes from the firm and they seemed to back this up, saying that most contracts require that insurance is taken up at completion only but that some require it at exchange and to check the specific contracts. I checked mine and it definitely went with completion. I was quite surprised at that because all the comments I had read on this site in the past said that it was on exchange.

Our solicitor struck the insure at exchange out of contract. He said it was meaningless while we were obliged to complete the vendor was obliged to hand over house in condition at exchange - so if it burned down they'd be obliged to sort it out not us. If at exchange the house is burned down you don't have to complete because not in condition at exchange. Also it is impossible to meet insurance company conditions of care for other people living there. Think about it unless you have a rental-like contract forbidding smoking with the vendor how can you a non-smoker insure a house and be covered by someone else's kids surreptitious fag burning the place down.
He did also insist on some binding that the vendors continued their insurance though.

WestonDave

Our insurers were happy to "move" the insurance cover from one house to the other effectively covering both for a short period between exchange and completion. I think we will have to pay about £17 when we actually move but this is probably more to do with the larger size of the new property.