Home insurance when purchasing property

afkasurfjunkie

am approved for a mortgage at present and am in the process of buying a house. conditions of the mortgage include purchasing home insurance and life assurance. so am shopping around for home insurance quotes.

i have 2 queries.
one is, when looking for a quote, the date of the insurance policy must start in the next 30 days. but if i was to purchase it im not guaranteed that ill be in the house in the next month. so how does that work? get some quotes now and then come back and purchase just before sale goes through?

secondly, will the insurance companies contact my by phone/email only or will they send written info to the house address? im sure the current occupiers wont be too impressed if post in my name starts arriving at their house. maybe they will be delighed im taking the initiative but i'd be mortified.

TwoShedsJackson

Ring up and get some quotes, don't bother with filling in web based quotes etc. as they assume the property is yours already. On the day of final closing you can ring the insurance company, pay by card, and get them to start the policy at the time you are due to sign and collect the keys.

Same holds for the 'contacting' query, ring them and specify that you are not in the house yet.

sarkozy

I'm in a similar position. In a previous thread, I asked for advice on getting house insurance for a 100+ yr. old house, which I am finding difficult to get.

In principle, it's fine to look for house insurance after the signing of contracts and payment of the full deposit. While what you say sounds right, our solicitor mentioned something about needing the insurance fully processed by the time of closing, which could mean a two week lead-in time. Nevertheless, from the lending institution's perspective, money can only be 'drawn down' when Mortgage Protection/Life Assurance and Five Cover/House Insurance are in place. It's also critical that, in the case of having a mortgage, the lending institution must be noted as having an interest in the property (being the actual owner of it until the end of the mortgage).

I have already been through two brokers, I'm on my third. Once I know more about this particular point, I'll update this thread.

killers1

TwoShedsJackson wrote: »

On the day of final closing you can ring the insurance company, pay by card, and get them to start the policy at the time you are due to sign and collect the keys. .

You can only do this if you are purchasing without a mortgage. If a mortgage loan is involved the home ins letter of indemnity proving the lenders interest is noted on the policy and the policy has started needs to be submitted to your lender AT LEAST 3 working days prior to the closing date otherwise it will delay cheque issue.

killers1

afkasurfjunkie wrote: »

am approved for a mortgage at present and am in the process of buying a house. conditions of the mortgage include purchasing home insurance and life assurance. so am shopping around for home insurance quotes.

i have 2 queries.
one is, when looking for a quote, the date of the insurance policy must start in the next 30 days. but if i was to purchase it im not guaranteed that ill be in the house in the next month. so how does that work? get some quotes now and then come back and purchase just before sale goes through?

secondly, will the insurance companies contact my by phone/email only or will they send written info to the house address? im sure the current occupiers wont be too impressed if post in my name starts arriving at their house. maybe they will be delighed im taking the initiative but i'd be mortified.

You can ask the insurance co to email you everything. Once you know the reinstatement sum (as per the valuers report) you can arrange to complete the home ins forms so that the only thing remaining is to make them aware of the start date which needs to bbe a few days prior to closing in order to get the required letter of indemnity in to your lender in time.

sarkozy

That clarifies things for me, too. Thanks. That's *if* we actually succeed in getting house insurance.

afkasurfjunkie

thanks for the clarification.

P. Breathnach

Just a general point: you cannot insure a house in which you do not have what is termed an "insurable interest". In essence, when it is still the vendor's property, you can not insure it just because you want to buy it.

You acquire an insurable interest the day purchaser and vendor have both signed irrevocable contracts, and you would be foolish not to insure from that date. That point is typically 1-3 weeks before completion.

Liam D Ferguson

P. Breathnach wrote: »

You acquire an insurable interest the day purchaser and vendor have both signed irrevocable contracts, and you would be foolish not to insure from that date.

I've heard this point before and didn't really understand it. Why would I insure something that I don't own, even after we've exchanged contracts? I would assume that if the house is demolished by a passing elephant before closing, I cannot be forced to complete the purchase of something that is no longer as described in the contracts. In that instance, wouldn't it be the vendor's insurance that would have to put the house in order?

Or am I missing something?

P. Breathnach

Liam D Ferguson wrote: »

I've heard this point before and didn't really understand it. Why would I insure something that I don't own, even after we've exchanged contracts? I would assume that if the house is demolished by a passing elephant before closing, I cannot be forced to complete the purchase of something that is no longer as described in the contracts. In that instance, wouldn't it be the vendor's insurance that would have to put the house in order?

Or am I missing something?

I used the word "irrevocable" for a purpose: a point is reached where neither party can back out - elephant or no elephant. Once contracts have been exchanged, the behaviour of passing elephants is the purchaser's concern, hence the need to insure.

There is surprisingly little in either the contract or the title deeds that actually describes what building you are buying. In effect, you are buying the land, and any building standing on it is a bonus.

Liam D Ferguson

P. Breathnach wrote: »

There is surprisingly little in either the contract or the title deeds that actually describes what building you are buying. In effect, you are buying the land, and any building standing on it is a bonus.

Thanks for that. It's very interesting. So if I exchange contracts on a property, the property is damaged or destroyed and the vendor doesn't have insurance I can be forced to complete the purchase on the original terms. Sobering thought.