New Build. Exchange. Building insurance?

DJSINGH

Hi all,


I am buying a new build which is due to be completed next year.
From exchange, are we covered by the insurance via NHBC, or should we take out a separate building insurance cover too? I mean to cover any situations like the plot being burnt whilst its being built etc?



Any help?


Thanks

Lucky_Duck_2

The Contractor's insurance will cover the plot up to legal completion.

This is separate to the NHBC policy which covers certain defects in the property from year two to ten.

SmashedAvacado

I dont think your solicitor should have provided for risk in the property passing to you until completion, and if they had done that, then you would not be obliged to insure until completion. Its really inappropriate to insure a new build that isnt built yet. The developer should be taking that risk. Why not ask your solicitor to go back to the developer and say, that it is more appropriate for risk to pass from completion, given the nature of the property, and then you won't need to insure until its built and yours.

SmashedAvacado

Lucky_Duck wrote: »

The Contractor's insurance will cover the plot up to legal completion.

.

This is the case if you provide in the sale contract that risk passes at completion. If you provide that risk passes at exchange, then the buyer has the insurable interest and needs to insure. Which isnt appropriate on a new build. if the buyer's lawyer has advised them to insure from exchange, my view is that they haven't structured this right, and instead should be insisting that the developer takes this risk until completion - which would result in what you have said above.

DJSINGH

Thanks for the advice all!
I havent heard from my solicitor yet as was planning in advance. We only just reserved, and I was doing research!
Let me ask the solicitor about risk at completion!

Lucky_Duck_2

SmashedAvacado wrote: »

This is the case if you provide in the sale contract that risk passes at completion. If you provide that risk passes at exchange, then the buyer has the insurable interest and needs to insure. Which isnt appropriate on a new build. if the buyer's lawyer has advised them to insure from exchange, my view is that they haven't structured this right, and instead should be insisting that the developer takes this risk until completion - which would result in what you have said above.

Fair point, I'd made the assumption that the contract would specify that.

I suspect it could be quite difficult to get cover on exchange when the property is still under construction.