Issue with buildings insurance at point of exchange.

Heres_the_deal

I've placed this in the house buying section as I need some advice fairly quickly.

I have been trying for the past five days to insure a property at the point of exchange of contracts.

Aviva, LV and Churchill have given conflicting advice with none of them geared up for this situation online. More annoying they all provide online articles about this scenario.

All three initially confirmed over the telephone that I 'could' insure my new property at point of exchange. To undertake this, I have to note my mailing address is different to the insured address and confirm the residence would not be left empty for more than 30 consecutive days. After completion, I contact them to change my mailing address to that of the insured address.

Then in the next breath, they say I cannot as they do not insure properties I would not be residing in.

The training on this issue is woeful, it really is.

Has anyone on here managed this holy grail, and how did they achieve it?

canaldumidi

This is done by thousands of buyers on a daily basis.

* Use a comparison site plus online quote for the few insurerers ot on comparison sites.

* look at the policies as well as the prices

* if the property might be empty for more than 30 days, check and find an insurer that has a 45 or 60 day limit on 'unoccupied property' definition.

* use Exchange date as start date for policy

* activate selected policy when you exchange

Just checked LV's application online: it requests the address of the insured property and also a correspondance address if different.

Sandtree

canaldumidi said:

This is done by thousands of buyers on a daily basis.

* Use a comparison site plus online quote for the few insurerers ot on comparison sites.

* look at the policies as well as the prices

* if the property might be empty for more than 30 days, check and find an insurer that has a 45 or 60 day limit on 'unoccupied property' definition.

* use Exchange date as start date for policy

* activate selected policy when you exchange

Just checked LV's application online: it requests the address of the insured property and also a correspondance address if different.

You are missing the point @canaldumidi, if for example you look at the LV home insurance policy booklet it defines "building" as "the structure of your home, that belong to you and you’re legally responsible for"

At the point of exchange the property doesn't belong to you and isn't your home therefore no claim under the building section would be successful as its failed to meet the definition. 

Then if you look at the questions on the quote form and answering them as at the time of policy commencement... "is this your main home?" obviously the answer is no at exchange but the other options that then come up are not compatible with the situation either. If you ignore that and move on to the next bit you've got a host of questions about who is living in the property when the policy starts, if they have any business activities etc none of which are you probably in a good place to answer because the people living in the property when the policy commences is the vendor.

Yes the reality is people ignore all these things and say its their home, answer for their family etc however technically these would all be false disclosures and under CIDRA would mean the policy can be voided. In practice I've never seen a single home insurance claim made by the buyer between exchange and completion so its all theoretical 

Heres_the_deal

canaldumidi said:

This is done by thousands of buyers on a daily basis.

* Use a comparison site plus online quote for the few insurerers ot on comparison sites.

* look at the policies as well as the prices

* if the property might be empty for more than 30 days, check and find an insurer that has a 45 or 60 day limit on 'unoccupied property' definition.

* use Exchange date as start date for policy

* activate selected policy when you exchange

Just checked LV's application online: it requests the address of the insured property and also a correspondance address if different.

At first I contacted all three insurers via email; however, they were quoting 2 to 3 three days in replying. As I exchange today, I also telephoned them. Over the phone I was told the same as your advice.

Then the email replies came back saying 'I cannot as they do not insure properties I would not be residing in'

Hence the panic. Logically, your and there advice is sound, but I'm hesitant paying for insurance that 'may' be challenged. I'm trying to seek clarity from Aviva via the CEO office, but have to insure within the next 2 hours.

Heres_the_deal

Sandtree said:

canaldumidi said:

This is done by thousands of buyers on a daily basis.

* Use a comparison site plus online quote for the few insurerers ot on comparison sites.

* look at the policies as well as the prices

* if the property might be empty for more than 30 days, check and find an insurer that has a 45 or 60 day limit on 'unoccupied property' definition.

* use Exchange date as start date for policy

* activate selected policy when you exchange

Just checked LV's application online: it requests the address of the insured property and also a correspondance address if different.

You are missing the point @canaldumidi, if for example you look at the LV home insurance policy booklet it defines "building" as "the structure of your home, that belong to you and you’re legally responsible for"

At the point of exchange the property doesn't belong to you and isn't your home therefore no claim under the building section would be successful as its failed to meet the definition. 

Then if you look at the questions on the quote form and answering them as at the time of policy commencement... "is this your main home?" obviously the answer is no at exchange but the other options that then come up are not compatible with the situation either. If you ignore that and move on to the next bit you've got a host of questions about who is living in the property when the policy starts, if they have any business activities etc none of which are you probably in a good place to answer because the people living in the property when the policy commences is the vendor.

Yes the reality is people ignore all these things and say its their home, answer for their family etc however technically these would all be false disclosures and under CIDRA would mean the policy can be voided. In practice I've never seen a single home insurance claim made by the buyer between exchange and completion so its all theoretical 

Indeed, these were one of my concerns as well.

Golden_Glow90

But the condition of the property upon completion should be the same as when you exchanged so you would have grounds for a claim once you completed but not before.  That's the point of the insurance as you are legally obliged to buy it once you have exchanged

canaldumidi

Then my next suggestion would be a broker....

Are you also selling? ie already have a policy on current home? I believe many policies will include cover for the Exchange/Completion period of a purchase. Worth reading current policy if there is one.

TBagpuss

Or obtaining insurance through your mortgage lender - most lenders also offer insurance . It may not be the cheapest option but is likely to solve the issue and you can shop around when you renew 
If you are using a solicitors firm which also deals with private client (wills and probate) they can probably suggest compnaies as well, as it is common for executors to have to arrange insurance for probate properties wehere they are not living in the proerty and are not on the deeds.

Heres_the_deal

I'm not selling or require a mortgage. Also, I have no survey which all the exchange to completion insurers whish to see. 

Aviva are the most confusing. They now claim their online policies are different to their direct polices, and stand by their comment of not offering cover if you don't reside in the property. In other words 'Aviva online' do not offer exchange to completion policies but via Aviva direct they do.

On checking, Aviva online and direct have the same T&Cs ???

Sandtree

Golden_Glow90 said:
That's the point of the insurance as you are legally obliged to buy it once you have exchanged

You are not legally obliged to buy home insurance.

Your mortgage offer will almost certainly make you contractually obliged to buy insurance but the OP states there is no mortgage .

Snuggles

Sandtree said:

Golden_Glow90 said:
That's the point of the insurance as you are legally obliged to buy it once you have exchanged

You are not legally obliged to buy home insurance.

Your mortgage offer will almost certainly make you contractually obliged to buy insurance but the OP states there is no mortgage .

I assumed they meant you are legally obliged to buy the property once you have exchanged.