I’ve just secured my first investment property with contracts to be signed at the end of the week. My question is when is the right time to take out insurance on the property. Is it at settlement or when the contract is signed and deposit paid.
dont “quote” me… as im only partially sure.
I heard somewhere, that when you sign the contracts you need to insure the property. Technically between the time the property contract is signed till settlement the property is under 2 insurance policies, the buyer and seller. If the house catches fire, then its still insured.
[8D]
Regards,
Arty.[
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“Why work to the age where you cant enjoy
what you have worked for !.” (Author: Me)I’d take out Insurance straight away. Always best to be covered in case of unforseen events. We usually get our insurance locked in as soon as our offer is acceepted.
Yes, get it straight away, you don’t know what
insurance the vendors have and if something
happens they probably couldn’t force you to
settle as the property would have to be made
good but if you’re buying it then you obviously
want the property.andy
Hi gocats,
In the ACT at least you don’t need to get insurance over the property if it is a unit in a body corporate (but still over the contents) at exchange time as it is covered by the body corporate.However, if it is a house, I would be getting insurance immediately. I know a couple of people here who lost a hell of a lot of money last year during the fires for not having a place they had exchanged on insured. Not a good feeling!
LuckyoneHi all,
I send this to clients every day:- “As from the date of the contract you are in law, the owner of the property. The contract stipulates that from the date of signing, the risk of the house being damaged or destroyed lies with you. Accordingly, if you have not already done so, please urgently make arrangements to have the property insured against the usual risks.” This is from the REIQ contract anyway. (QLD) Houses only though, if there is a Body Corporate for a unit etc they will have insurance already.Cheers [
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SHAUNallidan, I am in the middle of one at the moment, I have a solictors letter confirming exchange and settlements dates etc etc and there is a paragraph in this letter stating;
‘Please note that you are responsible for taking out all relevant insurances in respect of the property as from the date of settlement or the date of possession if possession is taken prior to settlement’
I am in NSW and I know my solicitor wouldnt give me a bum steer so, what do you make of this?
BC
BC,
Go with what your Solicitor tells you. I only deal with QLD contracts and it is very possible there are a different set of rules in NSW.Cheers
SHAUNThe laws are different in each state.
I believe that only Qld law states that a property is at the risk of the buyer from the date of contract. Most other states require you to insure from date of settlement or possession.
For peace of mind, I suggest insuring from the date the contract goes “unconditional” in states other than Qld. You only end up paying a month or so extra insurance but it avoids any potential major problems prior to settlement if there is a fire or something.
I lived in Qld and knew that I needed to insure from signing of contracts.
I tried to do so here in NSW but the insurance company told me they would start the policy from settlement and my solicitor also advised that I needed it from settlement.
It must be different here. But I will get back to you as I will be seeing my solicitor tomorrow.
Cheers.
Simon Macks
Mortgage Hunter
[email protected]
0425 228 985Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.
Does anyone know the deal with these sorts of bits and pieces in WA?
Elysium-M ? Do you know anything about it? Do you organise insurance after contract signed or when settlement or when taking possession?
I would like to know so we can do our background research and take that cost into account.
Cheers
Steph.Success is 1% inspiration and 99% perspiration.
OK Team here is the scoop from my solicitor. This applies to NSW only.
There is no requirement for the purchaser to insure the property prior to settlement. The vendor is responsible to maintain the property in an as is condition subject to normal wear and tear. So if there is a fire or something similar then the house must be restored or the purchaser can walk.
He asked me to have the insurance in place approx two weeks before settlement only so that the lender has time to recieve a copy of the policy. The insurance can take effect from settlement, just needs to be set up prior. They wont lend on uninsured property.
Hope this helps,
Simon Macks
Mortgage Hunter
[email protected]
0425 228 985Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.
In WA you need insurance from the date of settlement.
Brett
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