Insurance between exchange and completion when 4+ weeks?

[Greshamst]

We are due to exchange on the house we’re buying soon, however we will not be completing until end of March due to the vendors waiting for a payment due then.

Once we exchange, we will need buildings insurance in place, however I’m struggling to find an insurance company that will provide insurance for an exchange/completion period longer than 4 weeks without us living there.

Anyone got any suggestions? I did try “Urban Jungle” insurance after googling recommendations for similar circumstances, but unfortunately they won’t insure a 3 bed 4 bath, only a 3 bed 3 bath, so out of luck there.

(Upper chain are pushing to exchange so everything is solid, we,’d also like to exchange sooner for peace of mind, so waiting until mid March to exchange is not preferable)

[alscar]

Might be best just to contact a local Insurance broker and let them find the Insurer for you ?
Appreciate the seller will still be living there until you complete but at least you won’t have to get over the vacant question that often arises.
Failing that you could ask your existing Insurers ?

[megaphone]

Can't you just insure it for a year like normal?

[Greshamst]

megaphone said:

Can't you just insure it for a year like normal?

All the companies I’ve enquired with have said the insurance wouldn’t be valid if we weren’t living there, and for a period of more than 4 weeks.

[IanA2]

I've bought and sold six houses and have never had insurance before completion.

Was I wrong?

[Mr E]

IanA2 said:

I've bought and sold six houses and have never had insurance before completion.

Was I wrong?

If it burns down before completion, you might be on the hook…

[Cow Corner]

IanA2 said:

I've bought and sold six houses and have never had insurance before completion.

Was I wrong?

Yes, and your conveyancing solicitor should have advised you of that fact.

[Jeremy-75qq8]

You can also ask your lawyer to ask the vendor to insure it for the period. I have done several long completions as vendor and I insure it anyway as if it burns down I really don't want a fight as to who is paying

[IanA2]

Cow Corner said:

IanA2 said:

I've bought and sold six houses and have never had insurance before completion.

Was I wrong?

Yes, and your conveyancing solicitor should have advised you of that fact.

Well they never did, I can't really understand why insurance should be required at exchange. Ownership (and thus responsibility) is not absolute until the completion of contracts. Until then, as I understand it, the title remains with the vendor.

I am truly confused.

Edit: Having read around a bit it seems the responsibility does indeed lie with the vendor (whoops purchaser) on exchange. Is this a new thing? The last house I bought was twenty years ago, and I am surprised that if insurance was required on exchange none of my solicitors (three different) mentioned this. My buying time scale is 1975 to 2004.

Edited by IanA2 on Friday 9th February 20:47

Edited again to change vendor to purchaser

Edited by IanA2 on Friday 9th February 21:06

[2 sMoKiN bArReLs]

IanA2 said:

Cow Corner said:

IanA2 said:

I've bought and sold six houses and have never had insurance before completion.

Was I wrong?

Yes, and your conveyancing solicitor should have advised you of that fact.

Well they never did, I can't really understand why insurance should be required at exchange. Ownership (and thus responsibility) is not absolute until the completion of contracts. Until then, as I understand it, the title remains with the vendor.

I am truly confused.

The common law position is that the risk of damage or destruction of the property passes to the buyer on exchange of contracts unless the contract provides otherwise.

[PhilboSE]

IanA2 said:

Cow Corner said:

IanA2 said:

I've bought and sold six houses and have never had insurance before completion.

Was I wrong?

Yes, and your conveyancing solicitor should have advised you of that fact.

Well they never did, I can't really understand why insurance should be required at exchange. Ownership (and thus responsibility) is not absolute until the completion of contracts. Until then, as I understand it, the title remains with the vendor.

I am truly confused.

Edit: Having read around a bit it seems the responsibility does indeed lie with the vendor (whoops purchaser) on exchange. Is this a new thing? The last house I bought was twenty years ago, and I am surprised that if insurance was required on exchange none of my solicitors (three different) mentioned this. My buying time scale is 1975 to 2004.

Edited by IanA2 on Friday 9th February 20:47

Edited again to change vendor to purchaser

Edited by IanA2 on Friday 9th February 21:06

After exchange you are committed to buying the property regardless of the condition it’s in…so you don’t really want to pay market price for a 4 bed home when you actually end up with a burned out shell of a 4 bed home.

[blueg33]

Op. Is the house unoccupied? Most insurers conditions won’t be that you live there, they are more likely that it shouldn’t be unoccupied for more than 30 days.

[LuckyThirteen]

Can't you just request a change to the contract?

Granted it's 'standard' but ultimately the contract is between you and the vendor.

[oblio]

Couldn't you just insure it for the 4 weeks and then when that runs out, re-insure it for the next period?

[LooneyTunes]

NFU have done it for me in the past (we had a gap between exchange and completion that could have been up to about six months).

The property was already insured with them by the current owners, so it was basically free money for them.

Might be worth giving them a call and/or finding out who the current owners insure with?

[IanA2]

PhilboSE said:

After exchange you are committed to buying the property regardless of the condition it’s in…so you don’t really want to pay market price for a 4 bed home when you actually end up with a burned out shell of a 4 bed home.

Which raises another issue.

Exchange as I understand it is a commitment to buy the property and should you pull out you would forfeit your deposit.

Surely then, if after exchange you were uninsured, and the building was razed, you would pull out and lose the deposit and not be liable for the total loss.

[PhilboSE]

IanA2 said:

PhilboSE said:

After exchange you are committed to buying the property regardless of the condition it’s in…so you don’t really want to pay market price for a 4 bed home when you actually end up with a burned out shell of a 4 bed home.

Which raises another issue.

Exchange as I understand it is a commitment to buy the property and should you pull out you would forfeit your deposit.

Surely then, if after exchange you were uninsured, and the building was razed, you would pull out and lose the deposit and not be liable for the total loss.

Actually technically you are on the hook for the vendor’s losses by not completing. If you just decide not to proceed and the house is intact then the loss of deposit is often taken as a reasonable proxy for that. But if the house is a wreck then the vendor can’t put it back on the market and get the original price. So they could sue you for the difference.

[Mark-ri571]

The standard conditions of sale :

[Mark-ri571]

Suggest you ask your Solicitor to request that the standard conditions are amended such that risk remains with the Seller and that the Seller will insure the property until completion.

[rdjohn]

I am just about to commit to this scenario and so need to learn quickly.

My understanding was that exchanging contract simply places a commitment on both parties to complete the purchase on an agreed date. The deposit is a gesture of goodwill to ensure that commitment is not broken.

The buyer is obligated to hand over money; the seller is obligated to hand over the property in the condition that existed when contracts were exchanged. So the seller needs to maintain his insurance on his property until completion. That obligation is not the buyer’s responsibility.

Please explain why I am wrong? The last property we sold (late MIL’s bungalow) we had to take out special insurance to cover this scenario while it was empty for more than 60-days - the limit of the basic insurance cover.