Insurance for house (hopefully) nearing exchange

BigRoysDad

By liquidating some investments my Mum managed to buy and move into her new (downsized) house before selling her old house. Her buyer (and the lower chain) was taking ages to get sorted, so she decide to try to break the chain, which she just managed to scrape together the funds to do. Her house insurer covered her old property for 30 days on buildings-only basis after she moved out, as is normal I think. Her sale is still dragging on and the insurer kindly agreed to extend the cover at the old house for another 30 days, but that is nearly up. We have been told exchange should take place this Friday. I have two queries:
1. Do we need to insure the old property until exchange date or completion date?
2. Anyone know how to get a short term policy to cover the gap between the extra 30 days expiring and exchange/completion (if there is one), since I don't expect her insurer to extend it again - they said they do not normally insure empty properties, other than the standard 30-day overlap.

dc197

I think most buyers insure from the point of exchange, so it seems logical that she only needs to insure up until exchange.

"After you exchange contracts, you are liable for the property, and so you need to have buildings insurance in place before hand"
http://hoa.org.uk/advice/guides-for-homeowners/i-am-buying/how-do-i-exchange-contracts/

eddddy

BigRoysDad wrote: »

1. Do we need to insure the old property until exchange date or completion date?

Assuming your mum's solicitor is using the STANDARD CONDITIONS OF SALE (FIFTH EDITION) (see: https://www.lawsociety.org.uk/Support-services/documents/Standard-conditions-of-sale-5th-edition/ )

... the buyer is responsible for insuring between exchange and completion.


But many solicitors recommend that the seller also insures it - just in case the buyer's insurance is inadequate.

For example, if the house burns down between exchange and completion, and the buyer's insurance is inadequate - your mum could have a very big mess to sort out. She'd have to sue the buyer, and if the buyer goes bankrupt, your mum could lose big money.

So continuing the insurance until completion may be a good idea.