Title change and insurance

My understanding is that a contract note is a binding legal agreement to buy the property, usually with a depsoit of 10% or so and the balance a month or two later. The title changes when all the monies are paid. I saw a report advising the buyer to take out insurance prior to settlement. I've always had insurance set up ready to go and starting the day before settlement. The one day overlap is to ensure that if there is a defined event on settlement day there's cover.

Is there a need to take out insurance when the contract note is signed?

 

What if the property burns down before settlement?

 

The agreement is to sell a property in the same condition as it is when the contract note is signed. If the property does not fit that description at the time that the sale is meant to be completed then the contract cannot be met, and the the vendor must refund all monies paid.

 

Those insurance funds would help pay for that.

What are the savings in terms of waiting a few weeks to insure? Less than $100 in most cases I suspect.

There are also different laws in different states about when risk passes, but as you would have an equitable interest in the property at exchange then I think you would have an insurable interest.

But I am not a property lawyer - so may be wrong.