I’m in the process of buying a new house. My solicitor has said that I must arrange insurance and need to ‘make arrangements with your insurance provider that you can put the policy on risk as the result of a telephone call that you will make on the day of exchange of the contract’.
I’m not entirely sure what this means??! Any help appreciated.
When you exchange contracts you become liable for the structure of the building so need buildings insurance from the date of exchange. You dont need contents insurance because you are not living there yet but need contents insurance on completion date. Just speak to an insurance company who can quote which will be based on the price and location of the property you are buying.
Don't worry - it's largely legalese! In the sentence you have typed you can substitute "put the policy on risk" with the words "activate the policy" if that helps.
Basically you must have insurance in place from the day of exchange (because you must then buy the house, eve if it burns to the ground). What they are saying is that you need to arrange the cover and then call the policy provider once exchange happens to activate it. The idea behind arranging then formally activating cover is that if exchange fails to happen, you don't get stung for cancellation fees.
In practice you can, these days, often arrange cover in between the time that your solicitor calls for authority to exchange and them calling you back to say it has happened. You can also arrange cover online a few days before anticipated exchange and specify an activation date, but then take advantage of the "cooling off period" to cancel should things go pear shaped.
When you exchange you contract to buy the property and the seller contracts to sell, basically only someone with insurable interest can make a claim and hence therefore the buyer needs to insure
Check your policy as most buildings insurance policies do not cover carpets - instead these are covered under a contents policy so actually if the property has carpets or non glued down vinyl flooring then adding contents insurance from the date of exchange is actually advisable
It’s just so annoying and it should not be allowed. I had the offer accepted about two months ago and the house was off the market. They’ve accepted an offer from their neighbour for a private sale. Luckily I haven’t had the survey or searches done yet so it will just be solicitor fees. Good luck with your purchase. Hopefully it will all go through.