when do you start paying house insurance: from exchange or completion?

[firemaiden]

We are being told we have to organise buildings and contents insurance for a house we are hoping to buy from the date of exchange.

I'm a bit anxious about this because the house will be left empty (the sellers are going on holiday between exchange and completion) so we can't control whether they shut windows, put the burglar alarm on etc and we won't have any access to, or rights, on the property. Despite having no control, having to have insurance from exchange suggests that we would be liable if something happened such as if there was a burglary and damage was caused to windows/doors or any of the vendors's property inside the house was stolen.

Can I have got this right? Are we liable from exchange? do we need buildings and contents from exchange? under the burglary scenario above would we really have to claim on our insurance for the vendor's goods??!

Grateful for advice and any other tips on what we need to have covered from exchange. Vendors seem very litigious and very un-understanding from the email exchanges we have had over the sale, and we will have no spare money for any unexpected financial disbursements, so we need to be really sure we have covered ourselves.

You are liable from exchange because you are undertaking to buy the property and if it burned down you would still have to pay!Not sure about the contents thing but I suppose it's just easier to get both.

You do put buildings on risk as of exchange because technically you are committed to buying the property at the amount specified . Theirs should still be in place as well iirc. Less sure about contents had thought not, depends what is left I suppose but maybe it is for anything becoming yours (carpets , appliances etc) not their stuff . Ultimately your solicitor should know for sure.

from exchange

Yes, I just found out yesterday that it is from EXCHANGE not completion - have been told this by the solicitor, the insurance people and my dad the estate agent! Really glad i found this out as we are in the middle of 3 weeks between exchange and completion and only just taken the insurance out..

p.s. sorry - don't think you need to worry about contents til you complete though.

You need buidlings insurance from the date of excahnge, and contents insurance should be added onn the date of completion. your insurance company shoudl be fairly familiar with this. From exchange you're only worried about the building so burglary isn't an issue (but fire is).

If there is anything you want the vendor to specificaly do to comply with the insurance policy then let them know.

It is advisable to have insurance cover from exchange as it is at that point that you are committed to the purchase. If anything should happen and the vendors do not have adequate insurance, you may find yourselves considerably out of pocket.

At the end of the day you will only be starting your insurance a couple of weeks early and it would be silly to find yourselves with no cover for the sake of a few extra pounds.

Thanks, this is well worth knowing although Freckle, my research suggests it is quite an expensive option to start insurance from exchange rather than completion. One lender we spoke to said the price would be much higher if starting from exchange rather than completion because, I think, we are not in control of the property so I suppose we can't guarantee how it is kept. Maybe with the lender for buildings insurance that we have decided to go with, I will just tell them the start date and not mention it is exchange rather than completion unless they specifically ask.

So will definitely get buildings insurance but I wonder about contents (which is being done with a different insurer). Perhaps to be on the safe side we should start it early because if there was a fire, for example, we might need to renew the kitchen cupboards etc and I don't suppose that would come under buildings?

Thank goodness I asked but really there is so much to remember and, of course, everything turns out to be the most expensive option/paying earlier rather than later etc etc How much more can they sting you for when you move??!! Still think this should be vendor liability since although at exchange we agree to buy, they still need to have something to sell to us presumably.

You need house insurance from exchange of contracts. I'm sure I'm right from what my solicitor told me. The 'exchange of contracts' means the house is legally yours and its binding with no going back without huge expense, it is therefore your responsibility to insure it. Completion is 'just' the exchange of funds.