Do You Insure a Property on Exchange of Contracts

When buying or selling a property, one of the most important steps in the process is the exchange of contracts. This is the moment when both parties legally commit to the transaction and everything becomes official. But what about insurance? Should you insure a property on exchange of contracts?

The short answer is yes. From the moment contracts are exchanged, the property is considered your responsibility. This means that you should have buildings insurance in place to protect against any damage that may occur to the property before completion.

Buildings insurance is a type of insurance that covers the structure of the property, as well as any permanent fixtures and fittings. It typically includes cover for events such as fire, flood, theft, and subsidence. It`s important to note that buildings insurance is not a legal requirement, but it is strongly recommended.

When purchasing a property, it`s important to have buildings insurance in place from the exchange of contracts to completion. This ensures that any unforeseen damage to the property during this period is covered. It`s worth noting that if you`re buying a property with a mortgage, your lender will likely require you to have buildings insurance in place before they release the funds.

If you`re selling a property, you should also have buildings insurance in place until the completion date. This ensures that if any damage occurs to the property before completion, you are covered. Once the sale is completed, you should cancel your buildings insurance policy and inform the buyer that they are responsible for insuring the property.

In addition to buildings insurance, you may also want to consider contents insurance if you`re buying or selling a property. Contents insurance covers the belongings inside the property, such as furniture, appliances, and personal items. This type of insurance is not a legal requirement, but it can provide peace of mind and protect against loss or damage.

In summary, it`s important to insure a property on exchange of contracts. Buildings insurance should be in place from the moment contracts are exchanged to completion, and contents insurance may also be worth considering. As always, it`s important to shop around for the best insurance deals and read policy documents carefully to ensure that you have the right level of cover for your needs.