When should I buy buildings insurance?

kingkano

Might be a stupid question, sorry. We might be exchanging next week, with 1 week to completion. When should I 'buy' my buildings insurance?? I've read different information, like it needs to be done for exchange, surely that means you gotta buy it a week before so the papers come through? Also the mortgage company I think need the papers before they release the money for completion right??

Its no biggy I guess if I do it now, because you get 14days to cancel I presume?

Cheers in advance.

dwsjarcmcd

You should arrange the cover on exchange of contract as as you cannot back out of the sale at that point, as you then have responsibilities to and it is really to protect your interests. I wouldn't worry about getting the papers, as long as you arrange the cover, the papers will come through a little later. Your lender has a duty to ensure buildings cover is in place and will need proof that it has been arranged.

David

flying_v

I managed to buy my house without even having buildings insurance. Basically, it was all managed through the estate agent and I only found out when I had a plumbing emergency! Cue a lot of buck passing but in the end I got it through my mortgage provider.

I wish it was the case that the lender would require proof, but in my case it states in my contract that its my responsibility to arrange it.

kingkano

Thanks guys, panic over. I haev since been told some insurers will give you a month free (cooling off period kinda thing) for house moving.

SO I might just investigate and then arrange it over the w/e

courtjester

At exchange of contracts, you are legally committed to purchase the property in whatever state it is at the completion date - this gives you an 'insurable' financial interest.

If the property burns down between exchange and completion, technically the vendors' insurers would be responsible for reinstating the property.

BUT, if the vendor did not take out insurance, or took out insurance which only covered part of the loss, you would be left with suing the vendor for the difference in cost of reinstating at completion, and if the vendor has no assets...

So insuring YOUR interest at exchange of contracts protects your position in case of disaster and default by the vendor, even though you don't assume ownership or responsibility for the property until completion.