insurance on property before you settle
- Thread starter graisme
- Start date
The Y man has pointed to a large thread.
To possibly add additional info, I was currently going through this process a month ago.
Prior to me signing the contract of sale (exchange), I caught up with my conveyancer regarding this insurance thing. Previously, I used to arrange insurance for my properties on the day of settlement.
My conveyancer told me that in Qld, it is compulsory for you to get insurance on the property on the day of exchange. (i.e. the day the contract is signed).
I pointed her to an article that was published in June's edition of the API regarding a chap that had a house burnt down two days before he settled on the property. (page 56 if interested). His insurance company rejected the claim, as he didn't actually own the property.
My conveyancer said the article related to an event in NSW, and the law in QLD is different. Once you have a financial interset in the property, you need to get insurance for it. So, I guess it depends on which state you are in.
Cheers,
To possibly add additional info, I was currently going through this process a month ago.
Prior to me signing the contract of sale (exchange), I caught up with my conveyancer regarding this insurance thing. Previously, I used to arrange insurance for my properties on the day of settlement.
My conveyancer told me that in Qld, it is compulsory for you to get insurance on the property on the day of exchange. (i.e. the day the contract is signed).
I pointed her to an article that was published in June's edition of the API regarding a chap that had a house burnt down two days before he settled on the property. (page 56 if interested). His insurance company rejected the claim, as he didn't actually own the property.
My conveyancer said the article related to an event in NSW, and the law in QLD is different. Once you have a financial interset in the property, you need to get insurance for it. So, I guess it depends on which state you are in.
Cheers,
Long story short.
We had signed a pruchase contract in QLD. I went into local RACQ. Manager told me that I didn't need insurance as we were not the owner yet. I told staff that I needed insurance. Storm came through prior to settlement. Payout was apx $47500. Had only paid one month's premiums.
If in QLD, get house insurance before end of next business day.
We had signed a pruchase contract in QLD. I went into local RACQ. Manager told me that I didn't need insurance as we were not the owner yet. I told staff that I needed insurance. Storm came through prior to settlement. Payout was apx $47500. Had only paid one month's premiums.
If in QLD, get house insurance before end of next business day.
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I always get the cover prior to settlement - you need to organise it for the lender at settlement anyhow and a few extra dollars of cost for the 6 weeks or so gives me the piece of mind that as having committing too owning the property I have some protection if something goes wrong.
I guess if in NSW if that does not hold then the extra cost is deductible anyhow.
Hope this helps
Jane
I guess if in NSW if that does not hold then the extra cost is deductible anyhow.
Hope this helps
Jane
You have NO protection if something goes wrong as you are not the owner. You can't claim on a policy for something that's not yours.
There was a post on here about someone who exchanged on a house then it burnt down before settlement. It had to go through the vendors insurance. Don't know what state it was in.
I believe your conveyancer is mistaken; I don't believe the law varies by state.
I'm familiar with that particular case in API and spoke to the Insurance Industry Ombudsman office about it, and with that SS member by PM. The reasons he was unable to make a successful claim were:
1) The vendor voluntarily released him from his obligation to purchase. The vendor didn't have to do this, but since they did, the purchaser had an obligation to mitigate his damages and accept the vendor's offer to not proceed. (You'd be way annoyed if the vendor did this when the purchase was a bargain, and you wanted to buy and have the insurer fix it.)
2) He wasn't aware of his rights and unfortunately rescinded his contract prior to learning that he could have forced the issue.
The Insurance Industry Ombudsman would beg to differ. The pertinent staff member told me that if you have an obligation to purchase the property, you have an insurable interest.
I genuinely don't want to sound like a smart-***, but what's the basis of your view? I ask because I know it's quite possible to get contradicting opinions from legal experts, and I'd like to know how much weight to give to this position relative to the IIO.
I've invested in NSW and have had to have insurance in place just prior to settlement. Proof of insurance is sent to the financier before settlement takes place.
Peter
www.cashflowcalculators.com.au
www.privaterealestate.net.au
Peter
www.cashflowcalculators.com.au
www.privaterealestate.net.au
My view was based on what I have been told by my solicitor but after reading Tigers thread (with your great points) I stand corrected.
Don't worry about sounding like a smart_***. Better than being a dumb_***
We learn a lot from smart_***es.
Thanks for the infoIf you're looking for a remarkable insight, probably best to view the other posts, just thought I'd add my experience.
I had to take out an insurance policy on the full value of the unit I bought last year, as I was moving in prior to settlement (due to delayed settlement on vendor's end). I can only presume the vendor's solicitor wouldn't have requested it if it wasn't going to provide cover in some way.
Cheers
Greg
I had to take out an insurance policy on the full value of the unit I bought last year, as I was moving in prior to settlement (due to delayed settlement on vendor's end). I can only presume the vendor's solicitor wouldn't have requested it if it wasn't going to provide cover in some way.
Cheers
Greg
I read the thread where the SS member had such an event occur with some interest, which Ozperp referred to. As I remember he wished to proceed with the purchase and claim on the insurance he had taken out, in good faith. Didn't happen.
Nonetheless I would only accept a conveyencor's advice if they were willing to give a signed letter to that effect. Otherwise, a month or two's premium is simply "cost of doing business".
Nonetheless I would only accept a conveyencor's advice if they were willing to give a signed letter to that effect. Otherwise, a month or two's premium is simply "cost of doing business".
And relative to the figures thrown around during the transaction of property, it's a pretty insignificant cost.
Cheers
Greg
If you're looking for a remarkable insight, probably best to view the other posts, just thought I'd add my experience.
I had to take out an insurance policy on the full value of the unit I bought last year, as I was moving in prior to settlement (due to delayed settlement on vendor's end). I can only presume the vendor's solicitor wouldn't have requested it if it wasn't going to provide cover in some way.
Cheers
Greg
Which "other" posts are you referring too? Is that the experience you are adding?
Of course if you are living in the property you should have insurance. But you know what they say about assuming (presuming)?
I bought a NSW property at auction last month and I did get insurance cover immediately after signing the contract.
I haven't looked into the fine details but i'd hate to have to settle on a property which is burned down or damaged. I imagine my lender would be walking away if something like this happened and without insurance I'd be on my own.....
btw, the lender already asked me to have the insurance certificate ready for settlement day.
I haven't looked into the fine details but i'd hate to have to settle on a property which is burned down or damaged. I imagine my lender would be walking away if something like this happened and without insurance I'd be on my own.....
btw, the lender already asked me to have the insurance certificate ready for settlement day.
