Exchanging contracts and buildings insurance

When you buy a house, at what point does insuring it become your responsibility? Here’s what you should know about buildings insurance when you exchange contracts. 

When you buy a house, at what point does insuring it become your responsibility? Here’s what you should know about buildings insurance when you exchange contracts. 

Chris King
Home insurance expert
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Posted 21 FEBRUARY 2020

I’m buying a house. When do I need to have buildings insurance in place?

The house becomes your responsibility as soon as you exchange contracts, so this is the date from which you need to have an active buildings insurance policy. Your home is likely to be the most expensive purchase you’ll ever make, so you’ll want to guarantee peace of mind.

Can I wait until I move in to buy buildings insurance?

It’s not advisable to wait. If the house burns down between exchanging contracts and your moving date, you’re still committed to buying it. So make sure you’re covered by buildings insurance from the moment you exchange contracts.

Is buildings insurance a legal requirement? 

You’re not legally required to have buildings insurance, but your mortgage provider will usually insist that you have it. You don’t have to buy your buildings insurance from your mortgage provider though.  

If you don’t have a mortgage, there’s no obligation for you to have buildings insurance. But unless you can comfortably cover the cost of rebuilding your house or repairing it if it’s damaged, it should be seen as an essential.

Do I need buildings insurance if I’m a leaseholder? Or is this the freeholder’s responsibility?

That depends on your lease. Some freeholders buy buildings insurance for the whole property and have leaseholders pay their share through the service charge. But this certainly isn’t always the case, so check what’s written in your lease.  

If in doubt ask the freeholder, and be sure to do it over email so you have a written record.

What if the insurance provider asks questions I can’t answer?

When buying buildings insurance for a property you haven’t yet moved into, you may find the provider asks questions you can’t answer, such as the date of construction or what percentage of the property has a flat roof. In this situation, either be honest and answer ‘Don’t know’, or get your estate agent to ask the vendor. Don’t guess, as this could invalidate your policy when you come to claim if the information is inaccurate.

What does buildings insurance cover?

Buildings insurance covers:

  • your home’s structure (walls, windows, roof, etc)
  • outside fixtures (fences, sheds and garages)
  • permanent fixtures and fittings (including the bathroom suite and kitchen units)

Buildings insurance will protect you from a range of eventualities, including: 

  • fire, floods, storms
  • vandalism
  • frozen or burst pipes
  • subsidence and/or heave
  • fallen trees or lampposts

What should I look for when buying buildings insurance? 

There are a few things worth looking out for when you buy your buildings insurance: 

  • If you’re renovating your new house – or adding an extension or loft conversion – don’t forget to review your buildings insurance afterwards, as the rebuild cost of your home will probably increase. 
  • A robust policy will also cover you for alternative accommodation should you need to stay somewhere else while your home is being repaired. It will also give you public liability insurance, which covers you if someone is injured at your home and then attempts to sue you.

How much should I insure my new home for?

Remember, your buildings insurance doesn’t cover the market value of your home – it needs to cover the cost of rebuilding it. For more information, read our guide on how to calculate the rebuild cost of your home. 

If there is property damage between exchange and completion, who is liable? 

If the property sustains any damage after you’ve exchanged contracts – let’s say a fence falls down or a window is broken – the seller must tell you about it. However, it’s your responsibility to carry out any necessary repairs, which is why you need to make sure you’re properly insured.  

What happens if the seller removes fixtures and fittings?

The seller is legally bound to leave all fixtures – they can’t, for instance, walk off with an antique fireplace. They must also leave any fittings they agreed would be included in the sale, such as curtains or carpets. If you find something’s been removed that shouldn’t have been, contact your solicitor. 

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