Tuckfields chatted with Jodie Heneker, Director at Leedam General Pty Ltd recently. They discuss the importance of taking out insurance on a property that you are purchasing and why you should make it a priority in your settlement process.
Property Insurance – Who is responsible for what and when?
There is often confusion about who is responsible for the property insurance for the period from signature of a contract to settlement.
What does this mean for the seller?
Despite the contract providing for the property to be at the buyer’s risk before settlement as stated above, it is always recommended that a seller maintains their insurance policy until following settlement in the event that the buyer does not insure the property and there is a loss. A seller has a continuing obligation until settlement to take reasonable care of the property.
What does this mean for the buyer?
A buyer should (preferably as soon as they have signed the contract because they may not always be notified immediately that the seller has counter-signed the contract), approach their insurer to take out a cover note for the property. The type of insurance a buyer should take out will depend of what is being purchased.
Residential House and Land
For vacant land, a buyer should take out public liability cover pending the construction of a building on the land. Once the building has been completed, a comprehensive insurance policy ought to be taken out over the land and building.
For improved land, in addition to public liability, a buyer should take out comprehensive building cover which should include carpets, curtains, light fittings, furniture and any other fixtures or fittings within the building.
This blog, in primarily all of its entirety, was written by:
FindLaw Australia, written by McColm Matsinger Lawyers. 2017. Property Insurance – Who is responsible for what and when?. [ONLINE] Accessed 12 September 2017
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