As you embark on the exciting journey of buying a home, there's a crucial step that might not be on your radar: arranging building insurance at the point of exchange. It may seem like a mere formality, but it's actually a vital legal and financial safeguard.

So, why is building insurance required at exchange? At this stage, contracts become legally binding, meaning you're committed to purchasing the property. If anything happens to it between exchange and completion, you're still responsible. Building insurance protects you from unexpected damage, such as fire, flooding, or structural issues, during this period. Most lenders also require it as a mortgage condition to protect their investment.

What does building insurance cover? A standard policy safeguards the property's structure—walls, roof, floors, and permanent fixtures like kitchens and bathrooms. It doesn't cover contents, which require separate insurance. Ensure your policy covers the full rebuilding cost, not just the purchase price, as these can differ.

How do you check and choose the right policy? Before exchanging contracts, compare quotes from reputable insurers and scrutinise the small print. Watch for exclusions, limits, and special 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 organise this in advance to avoid delays and ensure your future home is protected from day one.

Building insurance isn't just a tick-box task—it's your first layer of defence for your biggest investment. And remember, if you need any guidance on securing the right insurance or navigating the home-buying process, we're here to help at Maddisons Residential!

 

 

 

If you need advice and help on buying or selling a property, please contact us to speak with one of our award-winning team who will be able to help you.