Re:Insurance before settlement

[Spades]

Hi all,

Re:Getting a cover note insurance before settlement on a house,does one get building insurance or building and contents insurance?

I presume one can cancel insurance after settlement if one found a better policy?

Any recommendations?

Or is it best to maybe checkout the net eg:budget to compare quotes etc?

Thanks in advance,

Cheers Spades.

 

[norwoodman]

Hi all,

Re:Getting a cover note insurance before settlement on a house,does one get building insurance or building and contents insurance?

I presume one can cancel insurance after settlement if one found a better policy?

Any recommendations?

Or is it best to maybe checkout the net eg:budget to compare quotes etc?

Thanks in advance,

Cheers Spades.

It should be mentioned in the PDS for each insurance policy whether it can be cancelled early or not. I'm currently in the process of cancelling a policy early myself.

Most insurers allow you to cancel early, but still worth checking.

 

[Singo]

One of our settlement was delayed by some 6 weeks and we even managed to get a refund by insuring with the same company but slightly different policy. Building insurance alone should be enough. If it an IP you may not need contents insurance at all.

 

[Spades]

Hi Norwoodman,

Thanks for prompt response

Do you only need building insurance up to settlement?

I wouldn't think you would need contents insurance but correct me if i'm wrong.

Cheers Spades.

 

[Spades]

Hi Singo,

If it was going to be a ppor,wouldn't building insurance do up to settlement?

Cheers Spades.

 

[Colin Rice]

Hi Singo,

If it was going to be a ppor,wouldn't building insurance do up to settlement?

Cheers Spades.

You don't own the house until it actually settles and titles are transferred to your name so if PPOR best to get both lined up. If IP the building insurance only would be required.

Will have to list the bank providing finance as the interested party so best to check with Bank/Broker on the required wording as it can vary slightly depending on the bank.

Also will have to ensure building cover is the same or more as "the replacement" value on the actual valuation. Check with Broker/Bank what this figure is if you don't have a copy of the valuation.

Best to get the above boxes ticked so settlement isn't delayed and potentially be up for penalty interest from seller.

Cheers.

 

[Singo]

Hi Spades
Building insurance alone is enough to go for settlement. I never had any contents insurance for PPOR and IPs. No problems.

 

[Spades]

Thanks all!

Makes more sense to get building insurance up to settlement BUT i am going to need contents insurance as well after settlement as it's going to be a ppor.

So i'll weigh it up after checking out a few policies.

Cheers Spades.

 

[The Fence]

You don't own the house until it actually settles and titles are transferred to your name so if PPOR best to get both lined up. If IP the building insurance only would be required.

Well, not so fast on that one...for IP's anyway.

According to the ATO:

CGT assets bought under contract
Purchases under contract, such as land, houses, businesses, shares, one-tonne utilities and boats, don?t always result in the date of contract and the date of possession being the same. In these instances, your acquisition date is the time you enter into the contract (normally the date on the contract) and not the date you take possession or the date of settlement.

Ref: http://www.ato.gov.au/General/Capital-gains-tax/Acquiring-and-owning-CGT-assets/Date-of-acquisition/

 

[Colin Rice]

Well, not so fast on that one...for IP's anyway.

According to the ATO:


Ref: http://www.ato.gov.au/General/Capital-gains-tax/Acquiring-and-owning-CGT-assets/Date-of-acquisition/

Granted, for CGT purposes.

Would need to check with your insurance company when they deem ownership to begin to be 100% satisfied. I would say at settlement

Thanks for the link though, some interesting facts to consider.

 

[Colin Rice]

Or is it best to maybe checkout the net eg:budget to compare quotes etc?

Get an insurance broker to assist you. They should know the policies inside out and will assist if you have to make a claim as well.

 

[Spades]

Hi Colin,

Yes i was considering an insurance broker.

Also thanks again for sending those classic PDF books...Should make for some good reading once the dust has settled.

Cheers Spades.

 

[The Fence]

Also, I remember the bank would not approve a loan on a purchase unless it had a copy of a insurance cover.

Think you'll find you need insurance at contract date. Settlement just confirms ownership has been processed.

Same for the vendor who is supposed to keep insurance until settlement, just in case ownership isnt processed (settled) and remains the owner.

That's the way I understand it anyway.

 

[Colin Rice]

Also thanks again for sending those classic PDF books...Should make for some good reading once the dust has settled.

Your welcome