Becoming a homeowner is exciting – you’ve finally made it onto the property ladder and you have a place to call your own! But it comes with duties too – it’s the first time you’ve been responsible for a building.
That’s why you’ll need to think about taking out home insurance. A home insurance policy will protect you if something goes wrong with the property and you want to make a claim. So when do you need to get home insurance when you’re buying a house? Let’s find out.
When you need insurance
The moment you exchange contracts with the seller, you become legally responsible for the property. That means that if anything gets broken – like a smashed window or there’s a hole in the roof – you’ll have to pay for any repairs.
There might be a few weeks in between exchanging contracts and actually completing and moving in, but you’ll still need insurance for your new home. Even though the seller might not cancel their home insurance policy immediately, it’s important that you’ve got insurance in place personally. That way, if you need to make a claim because something goes wrong with the property, you’ll be able to do this yourself.
If you’ve got home insurance at your current property, you can transfer this to your new house. Ring up your insurer and tell them you’re moving house well in advance of your exchange date. They can set up the insurance transfer for the day you exchange contracts.
Depending on the property you’re moving from and to, you might find your home insurance is more expensive in your new house. Instead, it might be worth cancelling your existing policy and setting up a new one. Use a price comparison to compare different home insurance policies or an insurance broker like thinkmoney – they could help you find a deal that’s right for your situation.
What insurance you need
When you’re a homeowner, you’ll need buildings insurance. Your mortgage will probably have this as a condition so you’ll have to send over the details of your buildings insurance policy to your lender or broker. They might not let you exchange contracts until you’ve done this, so it’s really important you get it sorted in time.
On the other hand, contents insurance isn’t compulsory but that doesn’t mean it’s not a good idea. Not sure what buildings and contents insurance are? Buildings insurance covers the bricks and mortar of your property – that means any part of the structure of your home. Contents insurance is for all of your belongings, everything you’d take with you when you left the property.
If you still don’t know the difference between the two types of home insurance, check out our blog on buildings and contents insurance.