Is it possible to get a 'draft policy' in readiness to take out official home insurance?

LLM000

Hi

I am at the stage with my house buying purchase where we are due to exchange imminently. In order to do this we have to fill in paperwork to show we have home insurance - the issue with this is that we do not yet have a date of completion so we do not want to take out insurance picking a date we think we may complete on and then that date being extended a few weeks and us paying insurance for a house that is not ours.

When we asked our solicitors about this, they advised we could take out a draft policy in readiness. However, when looking at various insurance companies and filling in our information it takes us then straight to payment and starting the insurance. I can't see anywhere that offers a draft policy.

Is this something anyone else has had to overcome before/ if so how do you organise this?

Thanks!

CSI_Yorkshire

In the scale of house purchasing costs, how bad is a couple of weeks of insurance that you didn't need?

Also, don't you usually insure from exchange and not completion?

LLM000

CSI_Yorkshire said:

In the scale of house purchasing costs, how bad is a couple of weeks of insurance that you didn't need?

Also, don't you usually insure from exchange and not completion?

A couple of weeks isn't detrimental but even so I would rather not pay for something I wasn't using/ needing. Every penny counts!

I am not sure re at point you are supposed to take it out either exchange or completion - I would have thought it was completion as that is when the house will be legally ours and need to be insured. Who knows how long we will be waiting in the exchange part. 

jackieblack

Insurance should start from the date contracts are exchanged because then you are committed to complete the purchase.
If the house were to burn to the ground between exchange and completion you would still be committed to completing the purchase on the pile of rubble.

Nearlyold

Risk passes to the buyer on exchange under common law and in the Standard Conditions of Sale(5th Edition) used by Solicitors. Which is why it is advisable to insure from exchange unless your contract keeps liability with the seller up to completion.

CSI_Yorkshire

LLM000 said:

CSI_Yorkshire said:

In the scale of house purchasing costs, how bad is a couple of weeks of insurance that you didn't need?

Also, don't you usually insure from exchange and not completion?

A couple of weeks isn't detrimental but even so I would rather not pay for something I wasn't using/ needing. Every penny counts!

I am not sure re at point you are supposed to take it out either exchange or completion - I would have thought it was completion as that is when the house will be legally ours and need to be insured. Who knows how long we will be waiting in the exchange part. 

30 seconds on Google disagrees with you - has your solicitor not discussed this?

LLM000

Thanks all, I wasn't aware of this so it is helpful to know that we should have the insurance from day of exchange. In that case, if we are not aware of the exact date of exchange yet, how do we take out the insurance? Or further to my original query, is it possible to take out a draft policy?

kingstreet

Brokers can do it.

For example, we can submit an application to Paymentshield with TBA as the start date and details of the cover are emailed to the solicitor so the terms can be confirmed to the lender. Cover then starts from exchange of contracts, or completion if it's a newbuild.

Rodders53

Call one of the most competitive quotes for insurance you get to see if you can set up a 'to be agreed' start date???

ALL the online quotes allow a future insurance start date to be entered... so you can guess a date, but instruct your Solicitor to not exchange before that date.   I know I could get a quote for insurance e-mailed and that it was valid for a period of time.  I then could go back in to pay at a later date.  Think that's standard.  

Or you could ask your Solicitor to go back to the old system where the Vendor holds the building insured in your Contract.  {Joke! Your Mortgage Co would not agree!}

NB Many of the better policies provide cover for both the home one is selling and the home being purchased between exchange and completion... (provided no other insurance policy covers the same risk).  So it's only the bottom of the chain purchaser affected most of the time.

In the grand scheme of a hundreds of thousands purchase an extra month or so of insurance is really down in the noise. (My insurance renewal - unlimited buildings, unlimited contents and some other extras - was ca. £480 this year, excluding any no claims discount. £40 for a month).  You've likely been conned out of paid more than that for an indemnity insurance for something or another.

user1977

LLM000 said:

we have to fill in paperwork to show we have home insurance 

Whose "paperwork" are you talking about here? If this is just some sort of information for your solicitor's purposes, it's certainly not compulsory that they see any details of your insurance in advance of exhange - all they really need to do is advise you to put the insurance on risk on the day of exchange.