Buildings insurance during exchange?

proformance

Hi guys
We're on the cusp of exchanging and in the COT process (from solicitor to lender), our lender has (according to my solicitor) requested "buildings insurance".
The selling party have a valid buildings insurance policy, but of course, our names aren't on it. 
How does this usually work? Do we need to get an insurance policy out even at this -re-exchange stage
Thanks all,
Z

davidmcn

The lender only requires insurance to be in place from completion, so I'm not sure what they're expecting at this stage - ask your solicitor to clarify.

springmagpie

We just took out building insurance a week just before exchange for the new property. 

pinkteapot

davidmcn said:

The lender only requires insurance to be in place from completion, so I'm not sure what they're expecting at this stage - ask your solicitor to clarify.

Every time we've bought the lender has required us to have buildings insurance from exchange. 

OP - I've always got quotes when we're approaching exchange, then as soon as the solicitor has confirmed we've exchanged I've gone online or phoned to take out the policy and forwarded proof of cover to my solicitor.

Phone insurers for quotes - they're well used to policies which are buildings only from exchange then add the contents from the completion. Totally standard thing. You can just take out a full buildings and contents policy from the exchange date to save faffing, but you should really be informing your insurer that it's a house you're buying so the vendor is still living there during the initial days/weeks of the policy. 

Some insurers do actually say in the policy wording that they will cover a buyer of the property between exchange and completion (i.e. the vendor's existing house insurance policy may provide you with cover), but I've never bothered to ask the vendor the question as it would also mean trusting them not to cancel the policy between exchange and completion.

davidmcn

pinkteapot said:

davidmcn said:

The lender only requires insurance to be in place from completion, so I'm not sure what they're expecting at this stage - ask your solicitor to clarify.

Every time we've bought the lender has required us to have buildings insurance from exchange. 

Are you sure about that? It might be a good idea from your point of view to have insurance from exchange, but why would the lender care? They have nothing to do with the property until completion happens.

pinkteapot

davidmcn said:

pinkteapot said:

davidmcn said:

The lender only requires insurance to be in place from completion, so I'm not sure what they're expecting at this stage - ask your solicitor to clarify.

Every time we've bought the lender has required us to have buildings insurance from exchange. 

Are you sure about that? It might be a good idea from your point of view to have insurance from exchange, but why would the lender care? They have nothing to do with the property until completion happens.

Positive. Unless every solicitor I've ever used has been lying to me. 

Also e.g.: https://www.hsbc.co.uk/insurance/what-insurance-do-you-need-with-your-mortgage/ "It’s not a legal requirement, but most mortgage lenders require you to have buildings insurance in place when you exchange contracts."

Natbag

My current insurer is happy to cover my current property for buildings and contents as well as my new property for buildings only for the period between exchange and completion, then full cover switches to my new home after completion. If you have a policy in place already, just call them to arrange. If you need a new policy from exchange, still call them to let them know it's a new purchase and won't be owned/occupied straight away. You'll need to ask them to name the lender as an interested party and get the relevant proof anyway.

davidmcn

pinkteapot said:

davidmcn said:

pinkteapot said:

davidmcn said:

The lender only requires insurance to be in place from completion, so I'm not sure what they're expecting at this stage - ask your solicitor to clarify.

Every time we've bought the lender has required us to have buildings insurance from exchange. 

Are you sure about that? It might be a good idea from your point of view to have insurance from exchange, but why would the lender care? They have nothing to do with the property until completion happens.

Positive. Unless every solicitor I've ever used has been lying to me. 

Also e.g.: https://www.hsbc.co.uk/insurance/what-insurance-do-you-need-with-your-mortgage/ "It’s not a legal requirement, but most mortgage lenders require you to have buildings insurance in place when you exchange contracts."

If it were any sort of commonplace requirement of lenders it would have filtered into the Lenders' Handbook, which says:

6.14 Insurance

6.14.1 You must make reasonable enquiries to satisfy yourself that buildings insurance has been arranged for the property from no later than completion.

You should remind the borrower that they:

• Must have buildings insurance in accordance with the requirements of the mortgage contract no later than completion, and
• Must maintain such buildings insurance throughout the mortgage term.

Suseka97

We are in the same position and our solicitor has said it is a requirement of our lender (Nationwide) that we have BI in place from the point of exchange, but looking at the actual mortgage conditions it simply specifies a requirement to ensure the property is covered by buildings insurance for its full rebuild cost (no mention of at what point the insurance needs to be in place).  So I do wonder if it's something solicitors interpret on an individual basis.  Similar to pinkteapot - we've simply got a quote lined up ready to submit as soon as we hear we've exchanged.

JGB1955

Once you have exchanged you are committed to buying the property.  There is no going back. If it burns down between exchange and completion you still have to buy it - even if it's a pile of charred bricks.  You might want to think about insuring it in those circumstances......

Aspiration

I’d be over the moon we were close to exchange and organise from that point. 

Whilst highly unlikely you’ll have a problem as most people state lenders usually require it and for an extra £25 a month it’s not worth the worry. 

Good luck moving, always an exciting time!