Contents Insurance between Exchange & Completion

twinter12 · 16 May 2018 at 11:00AM

Please could anyone help? We had building and contents insurance on the property we were purchasing and between exchange and completion the place was flooded. Insurance are paying out on all building insurance but they say:

'I would remind you that when the burst pipe took place you had only exchanged contracts and did not actually own the property until after completion on 16 March 2018. During this time the cover in force was for the buildings only. Regrettably in respect of the quotes provided for the carpets and the blinds these are considered as contents and as such are not covered under this claim'.

Is this correct - our policy says building and contents so thought we would be covered - any views?

davidmcn · 16 May 2018 at 11:04AM

Depends on what the policy says, but it seems likely that it may have a condition saying it only covers buildings for the period between exchange and completion.

dunroving · 16 May 2018 at 11:07AM

twinter12 wrote: »

Please could anyone help? We had building and contents insurance on the property we were purchasing and between exchange and completion the place was flooded. Insurance are paying out on all building insurance but they say:

'I would remind you that when the burst pipe took place you had only exchanged contracts and did not actually own the property until after completion on 16 March 2018. During this time the cover in force was for the buildings only. Regrettably in respect of the quotes provided for the carpets and the blinds these are considered as contents and as such are not covered under this claim'.

Is this correct - our policy says building and contents so thought we would be covered - any views?

I can't help you, but interested to see the responses. On the face of it, I'd say this is correct. I have buildings only insurance set up for the house I am purchasing (hopefully exchange will be today ...), but there are carpets, etc., and a few items of furniture I am buying. So, on the same logic, they wouldn't be insured either.

What do your notes say for when you set up the insurance? Normally, the insurer would have asked you whether you need buildings only or buildings and contents. I said the former, because at the time it seemed logical, but now I'm not so sure!

twinter12 · 16 May 2018 at 11:12AM

It says both I just thought was easier to have both from the get go. I have read through and cant see anything that says buildings from exchange and contents from completion?

davidmcn · 16 May 2018 at 11:15AM

twinter12 wrote: »

I have read through and cant see anything that says buildings from exchange and contents from completion?

Then ask them to point out the relevant condition to you.

p00hsticks · 16 May 2018 at 11:17AM

Have you asked your solicitor about this ?

My understanding - which could be wrong - is that it's up to the vendor to ensure that the house is presented at completion in the same state as it was at exchange - so if your contract says that carpets and blinds were to be included in the purchase, and those carpets and blinds were ruined between exchange and completion, then it's up to the vendor (or his insurers) to ensure that they are replaced to a satisfactory standard.

Rambosmum · 16 May 2018 at 1:43PM

You can't insure contents you don't own. The carpets and blinds aren't yours (yet). The vendor needs to claim on his insurance for those, and leave them in the condition they were at exchange.

What caused the flooding?

Slinky · 16 May 2018 at 2:20PM

Rambosmum wrote: »

You can't insure contents you don't own.

Yet you can insure buildings you don't own...........

I recall a similar query arising with our purchase, we left it as short a period of time between exchange and completion just to reduce the time for the risk.

If there had been an issue arising, fortunately not in our case, the claim would have been against the vendor/vendor's insurance company if he had one.

kingstreet · 16 May 2018 at 2:39PM

Once contracts have been exchanged, you have an insurable interest because you have to honour the contract on completion day, whether the property is a smoking heap of embers, or you are dead.

That's why buildings insurance and life cover commence from then.

There would be no (real, verifiable) insurable interest in the contents of the property.

G_M · 16 May 2018 at 5:19PM

kingstreet wrote: »

Once contracts have been exchanged, you have an insurable interest because you have to honour the contract on completion day, whether the property is a smoking heap of embers, or you are dead.

That's why buildings insurance and life cover commence from then.

There would be no (real, verifiable) insurable interest in the contents of the property.

Surely if the carpets are included in the sale, then (in your words) "there is an insurable interest because you have to honour the contract on completion day"?

I would write back to the insurer, enclosing and referring to a copy of the policy certificate, and highlighting the contents cover start date.

Might be worth posting on the insurance board here where there are brokers.

kingstreet · 16 May 2018 at 5:33PM

That's why I used "real, verifiable" because the contents of the property would not normally become the possession of the purchaser at exchange of contracts despite them being offered as part of the contract.

I suspect it's this kind of grey area which would cause insurers to shy away from such cover.

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Contents Insurance between Exchange & Completion

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