Are you signing a contract on a property? Overwhelmed by all the legal jargon and paperwork to sign? Unsure why you should arrange insurance cover?
We have put together a straightforward article outlining when you need to have insurance on your new property for residential contracts in Queensland.
So, you have found a new property and you have now excitingly signed the contract. Step 1 – tick.
Where to now?
You will most likely already know if the property forms part of a Body Corporate. If it does, the insurance on the building is most likely already covered and not something you will need to worry about. The building insurance, when in a Body Corporate, is usually managed by the Body Corporate Committee or Manager and is something that you will eventually need to contribute to via Body Corporate levies. This is something that is generally sorted out settlement by your conveyancer.
However, if the building is not covered under a Body Corporate Scheme it is legally the buyers’ responsibility to insure by the end of the next business day after signing a contract on an existing dwelling. Once a contract is signed, you have an insurable interest in the property, and shouldn’t rely on the seller having a policy in place, as that protects their interests, not yours.
So now you’re arranging the insurance – how much do you need to insure? Initially when arranging insurance, only building and liability cover will generally need to be taken. There is no need to insure the current dwellers personal belongings (contents).
As for how much to insure? Remember, you’re buying the house and the land, and the purchase price reflects the value of both. You will need to work out a sum insured that you feel will adequately cover the rebuild in the unfortunate instance of a total loss. If you are unsure – there are many calculators around online that will help you determine what figures to use. Here is a calculator we like to use https://homebuilding.cordell.com.au/index.php?c=survey&profile=36
Once the property purchase has settled you will then need to add on contents cover. Even if you have purchased this property as an investment a small portion of contents cover should be taken to cover any fixtures and fittings, i.e. carpets, blinds and curtains etc…
Please note: if you’re purchasing a brand new property the building insurance cover will be required immediately prior to handover, as the builders’ Contract Works Insurance covers the property until that time (remember to always ask for a copy of this for your records!).
Most financiers will generally need a certificate of currency to finalise the finance of your new property and move settlement along. Also don’t forget to advise our staff who the mortgage is with when you take out your policy. This will ensure we issue the certificate of currency correctly to keep things progressing smoothly.
Any questions, or for further advice and quotes contact us.
