Insurance between now and knockdown of house

[MsAli]

Hi all,

Our building insurance policy gets over tomorrow! (one year from purchase). We're looking to demolish the house in the next 2 months. I believe though the bank expects us to have insurance on the property till it's demolished..

NRMA seem to not like the property being unoccupied. And the quote online is quite high as well if I put in the fact it is occupied. Further, I believe the cooling off for these loans is just 21 days...

Appreciate your input!!!

Cheers,
MsAli.

 

[spludgey]

From personal experience, banks only inquire about insurance when you first purchase the property or when you refinance.

Let's hope it's not going to slip your mind.

 

[MsAli]

From personal experience, banks only inquire about insurance when you first purchase the property or when you refinance.

Let's hope it's not going to slip your mind.

Sorry spludgey. I don't understand: "Let's hope it's not going to slip your mind." ?

I'm just wary that we should cover our basis....

 

[Jamie M]

I'd just keep in insured for peace of mind.

Cheers

Jamie

 

[spludgey]

Sorry spludgey. I don't understand: "Let's hope it's not going to slip your mind." ?

I'm just wary that we should cover our basis....

I meant in terms of renewing your policy.

I'd just keep in insured for peace of mind.

Cheers

Jamie

Peace of mind from what? I doubt the bank is going to recall the loan and it sounds like it wouldn't be a huge issue if the place burnt to the ground now.
The only thing that might be worth considering is that you also get public liability insurance, which could potentially be very expensive (though unlikely).

 

[Jamie M]

Peace of mind from what? I doubt the bank is going to recall the loan and it sounds like it wouldn't be a huge issue if the place burnt to the ground now.
.

Personally I'd part with the two months worth of premiums - if something happens in the mean time, they can make a claim. If it doesn't- than great, you've lost a couple of months were of premiums which shouldn't be too burdensome.

 

[MsAli]

Personally I'd part with the two months worth of premiums - if something happens in the mean time, they can make a claim. If it doesn't- than great, you've lost a couple of months were of premiums which shouldn't be too burdensome.

But how do I get those? Can we get a building insurance for just 2 months?

Further, can we if the property is not occupied?

 

[spludgey]

Further, can we if the property is not occupied?

Is it less than 60 days?

 

[Perp]

I went through precisely this dilemma when we were demolishing our unoccupied PPOR.

You can get public liability insurance on vacant land, and normal home insurance on an occupied home, but getting insurance for public liability on a property with an unoccupied home, even if the home is worthless, is quite difficult because the presence of the unoccupied home is an attractant to vandals - as we discovered - and is riskier than a vacant block of land, because of the public liability risk attaching to vandals hurting themselves.

Can you demolish earlier?

 

[SOULFLY3]

Could you sign up with a mob (I know TS has a 30 day cooling period) then move to another for the second 30 days...
FYI I just sold and it settled on Friday and got credited back $360 from the $480 building insurance I paid in November or December .

 

[Perp]

Could you sign up with a mob (I know TS has a 30 day cooling period) then move to another for the second 30 days...
FYI I just sold and it settled on Friday and got credited back $360 from the $480 building insurance I paid in November or December .

It's not paying that's the problem; it's finding somebody who'll cover you at all. Most policies won't cover a vacant home.

 

[MsAli]

NRMA seemed ok with unoccupied. 5k premium (i chose). 350k cover. $54 a month. You can't cancel post 21 days cooling off. So will cancel and repeat. They will refund in full. Pity when I came back to my desk my PM had emailed the last policy expires on 20th March.

Won't demolish till we have all approvals.

I don't mind if it burns or vandals break it as it only helps fund build cost

 

[Perp]

NRMA seemed ok with unoccupied.

Oh, I read it otherwise, based on your earlier statement: "NRMA seem to not like the property being unoccupied."

Also how does $5K equate to $54 per month?

 

[pinkboy]

Oh, I read it otherwise, based on your earlier statement: "NRMA seem to not like the property being unoccupied."

Also how does $5K equate to $54 per month?

Im thinking she meant the 'excess' would be $5k.

pinkboy

 

[MsAli]

Oh, I read it otherwise, based on your earlier statement: "NRMA seem to not like the property being unoccupied."

Also how does $5K equate to $54 per month?

Their online system didn't like it. Customer Service were ok with it.

$5k is the excess. $54 p.m is the premium..

Minimum excess was $500. But I don't mind $5k as the replacement value far outweighs the excess payment.......

 

[DaveM]

Yes definitely keep insurance, even if you switch to building only and use a pay by the month insurer and then cancel it when you are done.

It will be a requirement of the mortgage that the property is insured for a minimum value specified by the lender.

Consider the scenario where tenants have moved, you plan to demolish and let insurance lapse. You then get sick or lose your job etc and cannot proceed with the knockdown rebuild finance. House gets damaged/burnt down as its vacant, you lose all your CIV plus are then also up for site clearing costs on top.

And besides, what will happen if your floorboards get stolen???

 

[MsAli]

Yes definitely keep insurance, even if you switch to building only and use a pay by the month insurer and then cancel it when you are done.

It will be a requirement of the mortgage that the property is insured for a minimum value specified by the lender.

Consider the scenario where tenants have moved, you plan to demolish and let insurance lapse. You then get sick or lose your job etc and cannot proceed with the knockdown rebuild finance. House gets damaged/burnt down as its vacant, you lose all your CIV plus are then also up for site clearing costs on top.

And besides, what will happen if your floorboards get stolen???

Min value won't be much more than $150k. Min the insurer did was $350k..

agreed...agreed.....

Totally anybody?