For most people, a property is the biggest investment they will ever make. It is important to ensure it is well protected and the best way to protect your home in the case of damage or disrepair is by taking out home insurance. Contents insurance covers all the possessions inside your home, while buildings insurance protects the fabric of your home. This means it covers things such as walls, roofs, windows and other permanent fixtures. If you are in the process of buying a new home, you may be wondering at what point you should have buildings insurance in place and whether it is OK to take out buildings insurance once you move into the property.
It is not a legal requirement to have buildings insurance; however, if you are buying a property with a mortgage, your lender will insist on you having it in place at the point at which contracts are exchanged. The moment you exchange contracts with a vendor, you are legally bound to purchase the property and the responsibility for insuring it switches to you. Any damage that occurs to the property between the exchange of contracts and the completion of the sale must be reported to you by the seller, as the cost of repair will be your responsibility.
If you do not have buildings insurance in place and something happens to your new property, there is no protection for the lender’s equity. Things can go wrong at a property at any point, from a broken window during the house move to an unexpected burst pipe or an accidental house fire. Once the contracts are exchanged, the responsibility for the house is legally yours. Any damage to the property will need to be rectified by the buyer, which is why the protection needs to be in place at the point of exchange of contracts. Not having insurance would mean no protection being in place for the period between exchange and completion when you are not living in the house but it is your legal responsibility.
If you fail to have buildings insurance in place ahead of the exchange of contracts, the mortgage lender may withdraw their mortgage offer. A qualified conveyancing solicitor or conveyancing specialist, such as Sam Conveyancing, will be able to help and advise you and ensure the necessary paperwork is in place at the right time. The best conveyancing solicitors in Rugby, Runcorn or Rotherham – or wherever you are buying your new home – will also advise you to make sure the start date is correct for your buildings insurance, as accidentally putting the wrong date could invalidate any claims.
While buildings insurance is not a legal requirement, it is advisable even if you are buying a home without a mortgage. Buildings insurance can protect one of your biggest and most expensive assets. Shockingly, a study revealed that almost one-quarter of UK homeowners had no home insurance in place.
Buildings insurance covers the cost of repairs or rebuilding your property if it is damaged. Fixtures inside the home are usually covered by buildings insurance, as are external structures such as garages, greenhouses, sheds and fences. Events often covered under buildings insurance include fire, flooding, frozen pipes, storm damage, fallen trees, vandalism and theft.