Published on January 26th, 2017 | by admin0
Short Term Buildings Insurance Between Exchange and Completion
Your solicitor or conveyancer announces that it is time to exchange contracts with the vendor for your purchase of a new home. He or she is also likely to advise that you need to arrange buildings insurance cover for the property – and may refuse to continue to act on your behalf if you fail to do so.
This insistence might strike you as strange, since you are being advised to insure an asset that is not yet yours – the contracts you exchange commit you to making the purchase, but ownership of the home is not transferred to you until completion of the sale.
This is a period when specialist short term buildings insurance between exchange and completion is required. The circumstances are relatively unusual – since you do not own the property – and the insurance provides a specialist type of cover, so you might want to consult a specialist provider about its purchase.
Short term cover
Although you may be advised to arrange building insurance during the interval between the exchange of contracts and completion, you might still want time for the dust to settle, take stock and compare a range of options for longer term home insurance once the property is yours.
The cover you are likely to need during this transitional phase, therefore, is likely to be short term cover – involving only parts of the year, rather than the full 12 months of cover typically required by any other type of insurance.
How long is the short term?
When it comes to housing contracts, this is a notoriously difficult question to answer. Any solicitor or conveyancer is likely to advise that the period between exchange of contracts may be agreed between the purchaser and vendor, but is still subject to potential delays and holdups.
The Consumers’ Association’s Which? magazine, for instance, suggests that the typical interval between exchange and completion is just two weeks – but this might be lengthened quite considerably on agreement between the respective parties.
House insurance for three months is likely to cover the majority of circumstances and provide sufficient time for you to do last minute packing and prepare for the big move on completion of the sale.
If there is any delay in the agreed schedule, you might take further comfort in the fact that this type of insurance is typically very flexible and maybe extended on a month by month basis if the need arises.
One of the principal advantages of this type of insurance, providing essential cover between exchange and completion, is that it is short term insurance. Unlike practically any other form of general insurance, you do not have to arrange – and pay for – cover for the whole year, but may choose the number of months that may be necessary in your own individual circumstances.
Short term it may be, but that does not compromise the comprehensive protection for the home you are buying against such potentially disastrous incidents as flooding, fire, storm damage, impacts (by vehicles or from falling objects), theft and vandalism.