When to take out buildings insurance when buying a house

There are a great number of things to do when buying a home. Your solicitor or conveyancer will sort out most of these, including drawing up contracts and handling other legal paperwork. But there are some crucial steps you must take yourself, such as taking out buildings insurance for your new home.

If you are buying your property with a mortgage, taking out buildings insurance is usually compulsory. You may be approved for a mortgage, but only on the condition that you arrange appropriate insurance cover ahead of the purchase.

Timing is crucial when it comes to moving house, especially if you’re in a chain. You don’t want to do, or forget to do, anything that could hold things up. This is why it’s crucial to get your home insurance sorted at the right time.

When to get buildings insurance when buying a house

As the buyer in a property purchase, you are required to have appropriate buildings insurance in place by the time that contracts are exchanged. Exchange is the point at which you legally commit to purchasing the property, so it makes sense that you will also assume responsibility for insuring the property at this point. The seller’s home insurance will usually be cancelled by this date, and yours should kick in.

If you fail to arrange buildings insurance cover by the time contracts are exchanged, you could risk your mortgage falling through. This could compromise the whole purchase, and perhaps even collapse the chain - so it’s well worth getting organised.

Why buildings insurance matters

There are other important reasons to get buildings insurance besides it often being a compulsory condition of getting a mortgage. 

This kind of home cover provides you with a crucial safety net in case the worst should happen. It covers the whole structure of your property, from the walls, floors and roof to garages, sheds and fences. Permanent fixtures and fittings are also included, such as drains, cables and pipes.

If the worst should happen, your buildings insurance will cover the cost of any damage - or the cost of fully rebuilding your property. This is essential to ensure you won’t be left without a home or saleable asset, or left out of pocket trying to rebuild out of your own funds.

Buildings insurance can be a real lifeline if you suffer a fire, flooding or burst pipes. It also provides protection against natural disasters, collisions from vehicles or aircraft, subsidence, fallen trees and lampposts, and many other unlikely but possible situations.

How to get buildings insurance before exchange

You don’t need to scramble to get a new insurance policy up and running on the day of exchange itself. It’s far easier and less stressful to line one up in advance. Insurance companies usually permit you to choose the day that the policy will start. So, by liaising with your solicitor, you can find out the date of exchange and schedule your policy to start then.

This gives you plenty of time to do your research, getting quotes and comparing prices. You can ensure you have the right level of cover, at a price that works for you. Doing all the groundwork in advance is a really smart move, so there’s no panic or stress as the exchange date approaches. You’ll have everything lined up and ready to go.

Finding the right level of cover

It’s very important to get the right level of cover. Your insurance needs to cover every penny of the cost of fully rebuilding your home, if it ever came to it. There’s lots of advice and tools to be found online to help you work out this cost, including a handy online calculator on the Association of British Insurers’ website.

You can also read our guide to rebuild costs here.

Your mortgage company may recommend its own insurer, but you don’t necessarily have to use it. You can choose your own, but the lender is within its rights to reject your choice if it isn’t on their list of approved insurers.

Transferring an existing policy 

You may also be able to transfer buildings insurance from your current property to the new one, without having to switch insurers or take out a new policy.

You’ll need to contact the insurer with all the relevant details of the new property and arrange for cover to start from the date the contracts are exchanged. Make sure to check that your existing property will still be covered, either by your own policy or by the buyer’s, if you’re in a chain and have exchanged contracts.