House Insurance from Exchange of Contracts: A Comprehensive Guide

You're about to purchase a new home, and exchanging contracts is just around the corner. At this stage, you'll typically need to secure house insurance to protect your investment.

The average cost of house insurance is around £80-£100 per month, depending on factors such as the property's value, location, and condition.

It's essential to purchase house insurance before exchanging contracts, as this is usually a condition of the sale.

The buyer needs to insure the property from the point of exchange of contracts. This is because exchange of contracts is the point at which the contract becomes legally binding, and there is usually a week between exchange and completion.

You must ensure that a suitable policy has been sourced ahead of exchange, as the buyer is responsible for the cost of repairs from the moment exchange takes place. If the seller continues to insure the property, the amount insured may not be adequate.

The Standard Conditions of Sale place an obligation on the buyer to insure the property from the point of exchange. Clause 5.1.1 of the Standard Conditions of Sale states that upon exchange of contracts it becomes the responsibility of the buyer to insure the property.

You need to obtain quotes for buildings insurance well in advance of exchange, so that you are able to arrange for the buildings insurance to start immediately on the day exchange of contracts takes place. This will cover any risk to the buyer and also cover the risk of the lender not being able to recover the loan amount.

You don't need buildings insurance before exchange, but it's advisable to prepare cover so that it comes into force the moment contracts are exchanged. If you don't already have buildings insurance at exchange, it could delay the purchase if you've applied for a buy-to-let mortgage.

The buyer is required to insure the property from the point of exchange of contracts, which is usually a week before completion.

This is because the Standard Conditions of Sale, Clause 5.1.1, states that upon exchange of contracts, it becomes the responsibility of the buyer to insure the property.

The seller has no legal or contractual obligation to insure the property during this period, unless the contract specifically requires them to do so.

The buyer needs to ensure that suitable insurance is in place to cover the risk of damage to the property between exchange and completion.

If the property suffers damage during this period, the buyer is responsible for the cost of repairs from the moment exchange takes place.

The buyer's lender will also require them to have buildings insurance in place from the point of exchange, to cover the risk of the lender not being able to recover the loan amount.

You should obtain quotes for buildings insurance well in advance of exchange, so you can arrange for the insurance to start immediately on the day of exchange.

Most buildings insurance companies will give you the choice of a policy start date, so you can set up cover in advance once you know when the house will exchange.

To get an insurance quote, you'll need to provide your insurance provider with a lot of details about the property, which you can get from your conveyancer and the seller.

It's always worth asking your solicitor to check over your buildings insurance before exchange, to make sure you're adequately covered.

As a seller, you might be wondering what happens to your insurance policy after you've exchanged contracts with the buyer. The good news is that you're not entirely off the hook, but you don't have to keep your policy in force indefinitely either.

You're not legally required to maintain buildings insurance post-exchange of contracts, but your lender may require you to keep it until completion. This means that both you and the buyer will likely have separate insurance policies covering the same property.

It's common for buildings insurance policies to have a clause that transfers the insurable interest to the buyer between exchange and completion. This is usually included to protect you, the seller, and is normally voided when the buyer takes out their own policy.

You should strongly consider keeping your insurance policy in force until completion, as relying on the buyer's policy may not be a good idea. The buyer's policy may not be adequate, and they may not have even arranged one.

In fact, you should only cancel your policy after completion has taken place.

Here are some key points to remember:

It's always best to err on the side of caution and keep your insurance policy in force until completion. This will protect you and your investment, and give you peace of mind during this period.

The buyer is required to insure the property from the point of exchange of contracts, and they must ensure that a suitable policy has been sourced ahead of exchange.

Exchange of contracts is the point at which the contract becomes legally binding, and there is usually, on average, a week between exchange and completion, meaning the buyer must insure the property during that period.

The buyer is responsible for the cost of repairs from the moment exchange takes place, so it's essential to have suitable insurance in place to cover this risk.

If the seller continues to insure the property, the amount insured may not be adequate, so it's crucial to arrange your own policy.

The buyer's lender will set out their specific requirements in relation to acceptable buildings insurance, and one of those requirements will be that the buyer insures the property from exchange of contracts, covering both the buyer and the lender.

If you're purchasing a property, it's recommended that you obtain quotes for buildings insurance well in advance of exchange so that you can arrange for the buildings insurance to start immediately on the day exchange of contracts takes place.

The seller is under no obligation to insure the building from the date of exchange of contracts, although they may choose to do so.

In most cases, both the seller and the buyer will each have their own buildings insurance covering the same property, with the seller's policy serving as a back-up in case the buyer's policy is inadequate.

It's common for buildings insurance policies to have a specific clause that states when you're selling the property, the insurable interest is transferred to the buyer between exchange and completion, protecting the seller.

The seller's policy will only serve as a back-up for the seller in the event that the buyer's policy is inadequate or the buyer fails to arrange one, so it's essential to have your own policy in place.

You need to insure the property from the point of exchange of contracts, so make sure to source a suitable policy ahead of time.

The Standard Conditions of Sale place an obligation on the buyer to insure the property from the point of exchange, and if the property suffers damage between exchange and completion, the buyer is responsible for the cost of repairs.

You must have buildings insurance on exchange, especially if you have a mortgage on the property, as it will cover your investment in case of a fire, flood, or other damage.

If you're purchasing with a mortgage, your lender will set out their specific requirements for acceptable buildings insurance, including insuring the property from exchange of contracts.

Even if the seller continues to insure the property, the amount insured may not be adequate, so it's essential to arrange for your own buildings insurance to start immediately on the day exchange of contracts takes place.

The exchange of contract is the point at which you become responsible for the property, and if something happens before a policy is in place but after the exchange, your investment would be at risk.

You don't need buildings insurance before exchange, but it's highly advisable to prepare cover so that it comes into force the moment contracts are exchanged, especially if you have applied for a buy-to-let mortgage.

You can arrange buildings insurance before exchange, and most insurance companies will give you the choice of a policy start date, so you can set up cover in advance once you know when the house will exchange.

To get an insurance quote, you'll need to provide a lot of details about the property, which you can get from your conveyancer and the seller. Be honest with your insurer if you're unsure about any information, rather than guessing and risking inadequate coverage.

You should also ask your solicitor to check over your buildings insurance before exchange to ensure everything is in order.

Most buildings insurance companies will automatically provide cover for the period between exchange and completion, but it's essential to check the policy details to understand what's included.

If you're buying a property, you'll need to insure it from the point of exchange of contracts, which is usually a week or two before completion.

Here are some key things to keep in mind when finding and arranging house insurance from exchange of contracts:

Your buildings insurance policy needs to cover the cost of completely rebuilding the property should it be totally destroyed.

Most importantly, your insurance needs to cover the cost of completely rebuilding the property should it be totally destroyed. Your insurance provider will need to know a lot of details about the property to provide an insurance quote.

Index-linking your sum insured to reflect inflation is a good idea, so your policy keeps pace with rising property costs. This ensures you're adequately covered in case you need to make a claim.

Including legal expenses in your policy is also a good idea, in case any disputes arise. This can save you a lot of money and stress in the long run.

Your insurance provider will give you the choice of a policy start date, so you can set up cover in advance once you know when the house will exchange.