Getting Insurance after Contract but before Settlement

Discussion in 'The Buying & Selling Process' started by Pumpkin, 18th May, 2020.

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  1. Pumpkin

    Pumpkin Well-Known Member

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    Hi,
    I am getting rusty in this area and hope someone can give me a quick answer.
    At what point should a Buyer get Building & Contents Insurance? I thought one only has Insurable Interest after maybe the Contract becomes unconditional. But someone told me they are asked to get one after they signed the Contract.
    Thanks in advance!
     
  2. Shawn

    Shawn Well-Known Member

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    I've always gotten my insurance sorted once the contract goes unconditional.
     
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  3. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Plus Member

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    Risk passes at different points in different states. in some states it is settlement others it is contract date.
     
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  4. KateAshmor

    KateAshmor Victorian Conveyancing Lawyer Business Member

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    Once the contract is unconditional, to be safe. The vendor is generally supposed to maintain their policy until settlement, but you can’t force them to. If something happens at the property (like a fire or flood) before settlement, your insurance could save the day.
     
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  5. SeafordSunshine

    SeafordSunshine Well-Known Member

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    I think:
    it is as soon as you have paid money.
    You have a financial 'interest' in the property.
    not 100% sure
     
  6. KateSydney

    KateSydney Well-Known Member

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    The other reason it's safest to do it yourself is public liability. If your property is in Qld, for instance, and if for some reason the vendor has not maintained their policy on the home, you could be held liable from the day after contract day. And you really have no way of knowing if the vendor's policy is still valid or they've forgotten to pay it.
    But I would always say, do whatever your solicitor tells you.
     
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  7. Coconutwheels

    Coconutwheels Well-Known Member

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    Just get it from exchange of contracts, it's not much extra for piece of mind, in qld you are supposed to anyway.

    I used to have insurance arranged for just prior to settlement, then I had a house burn down on me not long after exchange (nsw).
     
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  8. Tom Rivera

    Tom Rivera Property Manager Business Member

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    In QLD you should have insurance once the contracts are co-signed.

    Correct me if I'm wrong, but I believe you can get a cover letter that will usually cover about the period until the contract goes unconditional anyway (i.e. 14 days).
     
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  9. Paul@PFI

    [email protected] Tax Accounting + SMSF Business Plus Member

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    Insurers have dropped the concept of cover notes since anyone can arrange a policy 24/7 and pay online. These days they issue a quote and you pay then you are insured subject to the policy and can even pay by month where th first month is payable later or on the phone / web. Insurance is subject to cooling off periods so a refund can be obtained. Sort of inverse to the old days.

    A Guide to Home Insurance Cover Notes | finder.com.au
     
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  10. Tom Rivera

    Tom Rivera Property Manager Business Member

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    Oooo I didn't know that! It's been a while since I've had to get a cover letter... used to do it a lot when I was a poor student, to get a few months of free insurance ;)
     
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