Buy House Insurance when Contracts Exchange

Buying ands selling a house can be one of the most stressful things you can do! The experts say it’ sup there with getting married and packing a young family off on a foreign holiday! There are so many things that you need to organize and quite simply not enough hours in the day, to get them done. An important consideration that we all really should put at the top of the list, is the house insurance. Let’s face it, you wake up one day and think, mmh, “buy house” but rarely we think of the house insurance.

All of that running around, doing this & that, meeting with solicitors accounts for absolutely zero if your house goes up in smoke. This piece is designed to give some simple, straight forward clarification, that every home owner ought to know. If you don’t know who should be insuring what, at exchange and completion, then read on! If you are too busy and the middle of a sale, then ring your broker and have it explained. It is best talking it through sometimes.

What are Buyer & Seller Obligations?

The responsibility for the insurance of the property is passed to the buyer with effect from the moment contracts are exchanged (with a few exceptions). A buyer’s solicitor must ensure that the buyer has placed in force a valid insurance policy from the moment of exchange of contracts unless exceptions apply).

The seller is under no obligation to insure the building from the date of exchange of contracts. They are at liberty to cancel their own policy from the date of exchange (although this is never something we would recommend).

What are the exceptions?

The only circumstance where the seller is obliged to continue to maintain insurance between exchange and completion are:

  1. When the contract of sale has been amended specifically to maintain the obligation to insure the property with the seller.
  2. When the seller has an obligation to maintain insurance, such as on a leasehold or tenancy agreement, where he has agreed to insure the building under a separate contract.

If the seller of the building is obliged to insure the property, the buyer’s solicitor should request evidence of insurance and that the policy is in force, any terms or warranties are adhered to and the premium is paid up to date. Contracts should not be exchanged until evidence of valid insurance is received.

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Existing insurance held by the seller

Many home insurance policies contain a clause extending the benefit of cover to the buyer between exchange and completion. However, this cover is intended for the protection of the seller only, in the event that the buyer has failed to insure the property. It is not designed to be utilised by the buyer, who is obliged to arrange insurance cover in his own name.

It is very important if you are buying (or selling), that everyone knows what they should be insuring and to always ask for evidence of the cover – and don’t be afraid to insist on this. Remember when you buy a house, make sure you have it insured from exchange, not completion (in most cases).

If you need to discuss anything when you buy house insurance and you are buying or selling, then give us a call on 0800 085 3761.

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Why choose the Property Insurance Centre

Independent advice by approachable staff online or by phone

Access to a wide range of insurers to source suitable insurance cover for your needs

Bespoke Insurance Schemes & Portfolio Policies available

We can tailor your policy to suit your exact needs to give you complete peace of mind

Competitive Premiums

Cover available for the buildings while the property is being converted, renovated or extended

Over 40 years experience working with the best insurers in the UK

Excellent communication so that you understand what risks you are insured against

Why choose the Property Insurance Centre

Independent broker with staff you can speak to by phone or online

Access to a wide range of insurers to source suitable insurance cover for your needs

Bespoke Insurance Schemes & Portfolio Policies available

We can tailor your policy to suit your exact needs to give you complete peace of mind

Competitive Premiums

Cover available for the buildings while the property is being converted, renovated or extended

Over 40 years experience working with the best insurers in the UK

Excellent communication so that you understand what risks you are insured against

Why choose the Property Insurance Centre

Independent broker with staff you can speak to by phone or online

Access to a wide range of insurers to source suitable insurance cover for your needs

Bespoke Insurance Schemes & Portfolio Policies available

We can tailor your policy to suit your exact needs to give you complete peace of mind

Competitive Premiums

Cover available for the buildings while the property is being converted, renovated or extended

Over 40 years experience working with the best insurers in the UK

Excellent communication so that you understand what risks you are insured against

Specialists in Commercial & Residential Insurance

We have over 40 years experience as Residential and Commercial Insurance Brokers. We find the right policy to suit your needs and understand the risks that a property owner can face in the course of ownership. We work closely with our Insurers to get the best rates and our experience and excellent relationships with them mean that we can provide cover for even the most difficult to place risks.

Whether you have an adverse claims history, a high value property or a large portfolio of properties, we can source suitable cover for you. Whatever your requirements, we can tailor a specialist property insurance policy to suit your exact needs and provide you with a range of quotes to choose from. Established in 1976, we are not a call centre but a specialist insurance broker with a traditional office mentality, where the client comes first.

Looking for a quote now? Give us a call on 0800 085 3761 or complete one of our quote request forms.

We are also authorised and regulated by the Financial Conduct Authority and you can view our registration here.

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