Q. When should I start insuring the property that I am buying?
Buildings insurance should ideally be taken out right before exchange of contracts. This is because once contracts have been exchanged, you are legally bound to buy the property and it will be in your interest to insure the property against unfortunate events. This means the insurance should start from the day contracts are exchanged, and not from the day completion is due to take place.
If you are buying the property with a mortgage, it will also be a requirement of the mortgage lender that you insure the property from the day contracts are exchanged.
As a minimum, the buildings cover should be at least the reinstatement value of the property. The reinstatement value, which is the cost to rebuild the property from scratch, can be found in the valuation report if you are having a mortgage or, if you had arranged for an independent survey to be carried out, your surveyor may be able to confirm.
It is recommended to obtain quotes for buildings insurance before contracts are due to be exchanged, to ensure you can get the best insurance to suit your needs and, if you are having a mortgage, that the policy meets the mortgage lender’s requirements.
If you are buying a leasehold property, the landlord would normally have the responsibility of insuring the building. It is best to check with your conveyancer that this is indeed the case.