Insuring Your House as Soon as Contracts are Exchanged
During the house buying process, you normally have more than enough on your plate what with slow solicitors, pushy estate agents, pessimistic surveyors and finickity vendors. Combine this with actually organising the move, it is easy to let things slip your mind. I find lists are the way forward, and at the very top of this list I would write buildings insurance.
As the purchaser, it is your responsibility to insure the building that you are buying from the moment that you exchange contracts (not move in) this is due to the fact that from this point you are legally bound to buy it and the vendors are legally bount to sell it to you. This does not, however, mean that you are responsible for its contents as it is not yours and you have not moved in yet. This comes at completion when you open that bottle of bubbly, bring all of those bursting boxes in and the real fun begins.
If you use an online service for your buildings insurance - be warned, you will need to ensure that your sums insured (re-building costs) are accurate. Unfortunately, it is all too common that people are underestimating this, or worse trying to scrimp and save by keeping the sums insured low. This is a risky business and is a 'trap' that can be avoided. You should review your sums insured annually as property prices often fluctuate by 10% or more and therefore the cost of labour and materials to re-build your (new) home could also in relation to this. Two recent examples that we have come accross and rectified will scare the life out of you and ensure that, next time, you invite the professionals round:
- 4 bed detached built 1609 with various extensions over the years
Client declared - £263,000
Actual re-build Valuation - £644,000
- Grade II listed detached three storey property built in 1840
Client declared - £500,000
Actual re-build Valuation - £3,370,000
Now these are two extreme examples but if either of these had been raised to the ground, they would have only been awarded what they had declared therefore having to build something not only smaller but significantly different to the original building. Now would you be granted planning permission for your new hovel. . . who knows?!?!?
Whilst completing your form online, it may be that the lure of not disclosing Battersea Powerstation at the bottom of your garden or the fact that your property is in the middle of a runway becomes too enticing as it lowers your premium by half, but these are material facts and non-disclosure would void the policy and therefore the preverbial would certainly hit the fan.
You will also need to read and inwardly digest all of the documentation that is applicable to your policy as there may be various excess', exclusions, conditions and warranties that could potentially make it problematic in the event of an unfortunate incident.
I have no doubt that all of you out there are more than capable of organising this in such a way that should the worst happen, you are more than covered. But . . . do you really want the hassle when your broker can do all of this for you and take the stress out of risk. It is odds on that you will get better, more applicable cover and at a cheaper price than all of those, very convenient, websites.
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It's your choice.
