I am in the process of purchasing a property, when should I take out buildings insurance?
  • 14th Oct 2019
  • Article written by Demi Crick
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Buildings Insurance is put in place to provide protection for the cost of rebuilding a property if it is damaged or destroyed. When purchasing a property it is vital that you take out buildings insurance from the time at which you take an interest in the property which is usually from exchange of contracts. It does, however, depend on whether the property is freehold or leasehold as to whether you are required to insure the property or whether this is the responsibility of another party.


With leasehold properties, insurance is almost always the responsibility of the landlord and you will only need to take out contents insurance on completion. With leasehold properties it is important to obtain a copy of the landlord’s buildings insurance policy to ensure that this meets your needs, and the needs of any mortgage lender. It is essential to check that the landlord’s policy offers adequate protection and provides a sufficient level of cover for the property.


With freehold properties, unless the contract expressly states otherwise, the risk and responsibility in the property passes to the buyer once contracts have been exchanged and, unless it can be proven that damage was caused by the seller, any damage caused to the property becomes the buyer’s responsibility from exchange of contracts. In some case, the risk will remain with the seller until the matter has completed, this is often the case where the property is a new build and is still in construction. If this is the case then the interest of the buyer (and their mortgage lender) should be noted on the developer’s insurance policy from exchange of contracts.


Buildings insurance will be a condition of any mortgage lender and it is important to ensure that the insurance policy for the property meets the lender’s requirements, which will be set out in the mortgage offer.