Insurance Before Settlement Legally Required?
- Thread starter JWR
- Start date
You'll be fine as long as nothing bad happened to the property from friday to monday.
Different states are different. In SA I'd have insurance as soon as contract is signed by vendor. If house burns down pre-settlement its the buyer's problem.
This is interesting reading.
I have been advised by an insurance broker to not get insurance until settlement.
Would be interesting to see what would/could happen if the property was destroyed between contract execution and settlement if that advice was brought to light in a legal dispute?
I have been advised by an insurance broker to not get insurance until settlement.
Would be interesting to see what would/could happen if the property was destroyed between contract execution and settlement if that advice was brought to light in a legal dispute?
I always ask my lawyer to insert a special condition that the risk remains with the seller until settlement. Sellers usually keep their insurance until settlement, anyway, so it simply avoids the unnecessary expense and complication of two insurance policies.
Further, I believe that if both seller and purchaser insure the same property, it can create a nightmare if there is actually a claim, as to whose insurer pays. That can be the insurers' problem if the coverage is similar, but I know of situations where - at the time of a flood - one policy (buyer's?) had flood coverage and the other policy didn't, and creates uncertainty and arguments about whether flood coverage is active or not. (Note to self: ensure that when sellers keep their insurance, my special condition ensures that it's adequate coverage!)
Does anybody know what the logic - if any- is that lies behind this standard condition?
that's really helpful, I couldn't understand really why you would need insurance until you're the legal owner. First time I've come across this.
thanks Simon & DT,
In NSW you do not have an insurable interest until settlement.
Insurance is only required if you have a loan and the mortgagee requires it. In NSW that is from the date of settlement (a cover note will generally suffice from the day of settlement).
Hi Colin
I know this, but I was recently told that once I go under contract the property is also my liability, if it burns down I may end up wearing it.
Better to be safe then sorry, we are talking about a couple of hundred (depending on value and settlement time) in $x00,000s upon $x,000,000s.
I am sure there is a clause that the vendor has to present the property as inspected. Which we have in VIC.
Even still I have a vested interest in the property and its location so why not pay a small price for piece of mine.
I am sure there is a clause that the vendor has to present the property as inspected. Which we have in VIC.
Even still I have a vested interest in the property and its location so why not pay a small price for piece of mine.
Not sure if its standard or just a value-add/high margin but both the selling agent and my bank offered Free insurance from unconditional through to settlement. QLD here too. We went with the Bank's offering.
Yup in vic
Not in sa as previously discussed.
But you're going to insure the property anyway, starting it a couple weeks earlier isn't going to break the bank and gives you some piece of mind anyway
They've harmonised quite a few things with national uniform legislation - including road rules, consumer law, and they're introducing a national curriculum.
Hopefully they'll eventually get there with property transfers and landlord-tenant law, too!
A timely post for me. I've just exchanged contracts on my first PPOR in ACT and noone has said anything about insurance before settlement. After reading this, I'm going to check with my solicitor first thing in the morning.
