Insurance can sometimes the last thing on your to-do list when purchasing a property.
With the search finally over, it’s time to get finances paid and book in pest and building inspections.
Insurance, unfortunately, can be an after-thought.
Although most conveyancers and lawyers will recommend that you take out a suitable home and contents policy, owners can sometimes be at a loss as to when they actually need this policy.
The simple answer is that as soon as ownership of the property is yours, your property needs to be insured.
This will mean undertaking your policy research in advance or getting in touch with an insurance broker who can ensure you have the policy to best match your needs at the very moment the property becomes yours.
In reality this means taking out your policy after signing the contract but before the settlement takes place.
For landlords, this can be especially important as you want to be able to lease the property out as soon as possible and start generating income.
If work needs to be done to the property, having home and contents insurance can be even more important to ensure that you are covered for any accidental damage that may occur during the renovation process.
Doing your research
When doing your research, be sure to check if your particular policy will cover this type of damage.
If you choose not to have your insurance policy in place at this time, you are solely reliant on the seller having an insurance policy (and that they’d be willing to make a claim) if damage occurs to your new property during the settlement period.
In most cases this damage will mean that the property is no longer in the condition that the seller promised, and you may not need to settle. However, if your heart is set on this property as your new home, it can leave you in a bit of a bind.
Should the current owner have already cancelled their insurance it can make things quite costly for them to repair but it will also draw things out a lot longer for the new owners of the property in terms of when they can move in.
If the damage is not sufficient enough to void your sales contract, this can mean you’ll be forced to settle on the property with the damage left as is.
This has the potential to leave you paying out of your own pocket for damage you did not do.
Getting your insurance policy to cover you during this settlement period is essential.
Author Bio
BMT Insurance work with some of Australia’s most experienced insurance providers to select the most suitable and cost-effective insurance for you. BMT Insurance have access to expert construction cost consultants that have inspected tens of thousands of properties each year, ensuring they have the necessary knowledge to calculate the replacement cost for your property and protect your investment.
Visit bmtinsure.com.au or call the BMT Insurance team on 1300 268 467 to discuss your coverage today.
