House insurance on exchange

[MinnieGirl]

I’ve been advised that on exchange, I need to take out buildings insurance for my new property. Fine. My current insurer won’t let me have two policy’s and won’t extend my cover to include the new property. So I would need a completely new policy. But I can’t find anyone who does a temporary exchange to completion policy. All standard policies ask if it’s my main residence. Which it isn’t. Yet. Can anyone help?

Most insurers will cover a new property from exchange to completion and then transfer the policy to the new home fully. Are you sure they won’t?

Yes. I asked them and they said no they wouldn’t do it. They would insure the new property from exchange but I would have to cancel the existing policy

Have you tried an insurance broker?

I've sent you a message

I took out a new policy with a different provider for the new house and cancelled the old policy on the previous house once I had moved because my first provider refused as well.

Edit - you can set up a new policy before exchange which will activate on a certain date.

Thanks

So, take out the new policy, and then cancel the current one once youve moved?

Just to update, I went to Direct Line who were so helpful, did me a quote over the phone and it’s £150 cheaper than the quote I got from a so called exchange to completion policy…

Surely the house is insured by the owners until you become the owner?

But you can cancel the policy for your current property as the person buying that will have the insurance for it

Agree
I’ve moved louds and that’s what we’ve always been told
We need to insure the property we are selling until completion. Not someone else’s that we don’t own yet.

If something happens between exchange and completion why would anyone not owning the property pay for that ?

Sounds like a way for insurers to pile in the profits

So if it burns down because you’ve left the gas on someone else’s insurance is paying for rebuilding it?
That’s Wierd

This is standard procedure when buying a property. So i suppose between exchange and completion the property is insured by both seller and buyer.

so if the property burns to the ground before completion the current house owner receives compensation as well as the buyer who is comitted to buy on completion date.

Which is Wierd because we’ve bought property 6 times ( recent one 2020) and we’ve always been told to keep the one we are selling insured as we are responsible for it until completion. Not the one we’re buying though. The sellers send confirmation of their insurance to our conveyancer/ solicitor as proof.

Is this something new then? I wonder

Once you exchange, you are responsible for the property you are buying…and the current owners are then responsible for the property they are buying. Seems crazy to me but hey!

As long as they have taken out insurance…. Our buyer hasn’t bothered to have a survey so I wouldn’t count in him taking out insurance. Plus contents wouldn’t be covered. I will cancel our existing policy the day we move

I haven’t moved for over 30 years so this is new to me! Our solicitor and both estate agents were all very familiar with it. When you exchange you become responsible for the new property that you are buying. So if anything happened it would be your insurance not the sellers that would cover it.

There must be a way cus how does everyone else with another property do it? Not everyone has their exchange and completions on the same day. For me, it was a bit different as I was FTB and exchanged/completed on the same day. I only had content insurance for my rental, but my solicitor said that the insurance definitely needed to kick in from the exchange date.

Thanks Good to know as we will be moving again. I’ve done a quick Google and this is what is says

• Risk Passes to You: Once contracts are exchanged, you are legally committed to buying the property. If the house burns down or is flooded the day after exchange, you are still required to complete the purchase, even if the property is damaged.
• Seller's Insurance Ends: While the seller should ideally keep their insurance in place until completion, they are not obligated to do so, and they may cancel their policy on the day of exchange.
• Mortgage Condition: If you are buying with a mortgage, your lender will likely insist that building insurance is in place from the exchange date to protect their investment.

So every goid reason to exchange and complete on the same day. It’s not something we like doing as it’s all such a rush but I wouldn’t want to rely on sellers not burning a property down and us having financial responsibility.

Learning something every day on mumsnet

I think it is only buildings insurance you take out for the property you are moving into, not contents as well.

But exchange IS when you become the liable owner in England.

Exchange is you signing the legal binding contract that declares you are the new owner of the property and that you can gain full access once the funds have successfully cleared and passed. There is usually a delay on this deliberately and simply to facilitate people organizing moving out. Completion is simply the end of the exchange process of moving the funds over so you can switch keys. On empty houses it can easily be done same day.

It doesn't matter if you have the keys yet or live their yet, you legally signed a contract to exchange the ownership to yourself and can no longer 'pull out' without consequence and are liable going forward.