Building insurance - when do I need it?

September 26, 2017
Paul Pappas

You’ve found your dream home. You are about to sign the Sale Contract and pay the required deposit.  So when do you need building insurance?

Protecting the biggest asset that you will have is a very important consideration when buying a property.  But when is it required?  When the Sale Contract is signed or at settlement?

This issue has been debated for years.  On one hand, when you sign the Sale Contract and pay the required deposit deposit, (usually 10%), it is considered that you have an equitable interest in the property.  So what happens if the property is damaged by fire, storm or any other event?  Should you rely on the building insurance cover held by the current owner?  Do they have a sufficient level of insurance?

On the other hand, some suggest that you cannot insure something that you do not legally own.  

The answer is up to 90 day free building cover on your home during the settlement period that we can arrange for you.  Please make sure that you talk to us about this.

(For strata unit properties, building insurance is arranged by the Strata Manager).

Posted in: Home loans

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