house insurance

[messmate]

when you buy a property in NSW, do you need to insure the house from date of exchange of contracts (previous owner still in residence) OR from date of settlement? Thanks

 

[kissfan]

Hi messmate.

Get a covernote to cover you from the date you first sign contracts.

Don't rely on vendor having insurance.

Regards
Marty

 

[buzzlightyear]

You'll probably find that your lender will ask that you have building insurance when applying for finance and may require it to go unconditional.

 

[messmate]

lender asked if we had insurance and said we "should" havie it as from exchange of contracts. Anyway we have building insurance to cover it. It really doesn't cost that much in the scheme of things. I was curious as to "the law" on when the buyer had to have insurance. I would have thought it was the vendors responsibility up to settlement.

 

[Aimjoy]

I would have thought it was the vendors responsibility up to settlement.

Messmate,

You need to insure it from exchange of contracts. Once contracts are exchanged then you "have an interest" in the property - and that is what you are insuring. Remember you have gone "unconditional" at this point.

Consider if the house burnt down or was damaged and the vendor did not have insurance or the where-with-all to fix it before settlement......you may still be forced to settle. It can get very messy.

And it is cheap....and is probably a bit of a rip with both vendor & purchaser both paying for insurance on the same property (albeit for 6 weeks only).

Regards,
Aimjoy.