Building Insurance: Essential Before Exchange
When you’re in the exciting process of buying a home, arranging building insurance might not be at the forefront of your mind. However, it’s a crucial step that serves as a legal and financial safeguard, ensuring your investment is protected from the moment contracts are exchanged.
Why It’s Required at Exchange
At the exchange of contracts, you’re legally committed to purchasing the property. This means if any damage occurs between exchange and completion, you’re responsible. Building insurance covers unexpected events like fire, flooding, or structural issues during this period. Lenders typically require it as a mortgage condition to protect their investment as well.
What Building Insurance Covers
A standard policy covers the property’s structure, including walls, roof, floors, and permanent fixtures like kitchens and bathrooms. It doesn’t cover contents, which need separate insurance. Ensure your policy covers the full rebuilding cost, not just the purchase price, as these can differ.
Checking and Choosing the Right Policy
Before exchanging contracts, compare quotes from reputable insurers. Read the small print to understand exclusions, limits, and specific requirements, especially if the property has unique features like a thatched roof or is in a flood-risk area. Make sure the policy starts on the exchange day, not completion.
Don’t Leave It Too Late
Your solicitor will likely request proof of insurance before exchange, so arrange this in advance to avoid delays and ensure protection from day one.
Building insurance isn’t just a formality; it’s your first line of defence for your biggest investment. At James Anthony, we subtly guide our clients through these crucial steps, ensuring peace of mind as you embark on your homeownership journey.
