Building insurance during contract period

Hi All

We have recently exchanged contracts to sell one of our IP's. Our tenants vacated the property prior to exchange, so the property is currently vacant.

I have now realised that our building insurance policy with Terri Scheer will expire about 6 days prior to settlement. I rang TS and they said I would still need to pay the full 12 months premium to renew the policy and then we can claim a pro-rata refund following settlement. Is there another way I can ensure we have full cover for the 6 days up to settlement without the need to outlay a full year's premium? For example, could I legitimately organise a cover note from a different insurer and assuming settlement happens, simply not pay the premium within the required timeframe and let the cover note lapse?

I am happy to pay the TS renewal premium if that is what's necessary to ensure the property is properly protected. I just thought I would explore the options to help our cashflow and save chasing a refund. Thanks.

Angela :)
 
For example, could I legitimately organise a cover note from a different insurer and assuming settlement happens, simply not pay the premium within the required timeframe and let the cover note lapse?

Yes, you could, but it will be the only cover note you will ever receive from that particular insurance company.....so choose carefully.
 
A very dangerous game to play.

Yes, you can get a cover note, and yes, you can cancel it as soon as you settle. You have saved money.

But what if someone had entered your property in that week and injured themselves? They have 3 years to claim on you. They don't even have had to have gone inside, simply falling while walking up to the front door can result in a claim.

Unlikely I know, but so are many other events we insure against.

With no insurance you are taking a huge risk.
Marg
 
...But what if someone had entered your property in that week and injured themselves? They have 3 years to claim on you. They don't even have had to have gone inside, simply falling while walking up to the front door can result in a claim...

Hi Marg. This is why I love this forum! I hadn't actually considered this scenario and unlikely as it may be, the impact on us if it did arise could be devastating. I made the rather ignorant assumption that any potential insurance issues would neatly crystallise during the period of the cover note (primarily up to settlement), and assuming there were no issues I was fine to let it lapse...as you say, essentially leaving me uninsured should someone submit a late claim. :eek:

Thanks to yourself and Propertunity for the feedback. This one is now a no-brainer for me. Pay the insurance renewal with Terri Scheer and claim the relevant pro-rata refund after settlement. Glad I asked this question before acting! :D

Angela
 
Hi all. Just a feel good story by way of an update on what happened re: our insurance. About a week before our building insurance was due to expire on 1 May 2010, I rang Terri Scheer with the intention of doing the right thing and paying the full renewal premium and then seeking a pro-rata refund following settlement. The girl I spoke to was lovely and we were talking about what a shame it was that I was having to pay a year's premium for only 6 days cover. She suggested that there was some leeway for renewals. i.e. renewal premiums can be paid a week or two late with no penalty and are simply backdated to the expiry date on the policy.

The girl suggested that I could just not renew the policy and if something were to happen to the property between 1/5/10 and settlement on 7/5/10, I would just need to ring up and pay the renewal premium and then get transferred through to the Claims Department to lodge a claim. However I recalled Marg's reply on this forum and posed this scenario sayiing I wanted to be absolutely sure that we would be covered in case anything happened during this period that wasn't ultimately claimed straight away. The girl I spoke with decided to check with her Manager.

Next thing I know the Manager offered to extend my current's year's building insurance policy to cover the extra 6 days free of charge!

A notation was put on our policy to formally extend the expiration date to midnight on 7 May 2010 (date of settlement). This notation ensured there was no grey area and showed our policy to be valid during the 1/5/10 to 7/5/10 time period. All they asked was that once the property settled on 7 May 2010, I needed to ring Terri Scheer and advise the property had been sold, so the policy could be formally closed on their system as at the extended expiration date of 7 May and to prevent reminder notices being sent out for payment of a renewal premium.

I don't know if it made any difference that we had another IP with TS that they made the offer to extend. Maybe it was karma that I was doing the 'right' thing, but given it was an insurance company I was dealing with I thought the outcome was great!

Angela:)
 
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