Insurance – when should a Buyer obtain insurance
The standard conditions of a residential REIQ contract of Sale states ‘The Property is at the Buyer’s risk from 5:00pm on the first Business Day after the Contract Date’. Therefore, we recommend that the Buyer obtains an insurance policy as soon as possible after executing the contract. –
The Seller has an obligation to take reasonable care of the property. The Buyer is required to settle (in accordance with the terms of the contract) if the property is damaged between the Contract Date and settlement (i.e. fire). However, if the property is destroyed or the extent of damage is vast that it is unfit for occupation then the Buyer may have a right to terminate the contract.
Insuring a House
We recommend that Buyers arrange a ‘Home and Contents’ insurance policy if the Buyer is purchasing a house with no Body Corporate. The building insurance policy covers both the land and dwelling and the contents insurance policy covers personal items, furnishing and household items.
Buyers should obtain advice from an Insurance Broker in order to determine the best policy cover for the property.
Insuring a Unit or Townhouse
The body corporate is responsible for insuring the building for the external of the building, common property and all body corporate assets (i.e. lifts). Buyers should receive a disclosure statement from the body corporate outlining the insurance information. Therefore, Buyers should obtain advice from a insurance broker in order to determine the policy that is suitable. We recommend that buyers arrange insurance cover for the contents of the unit (this includes the internals of the property such as appliances and flooring).
Insurance – finance approval
If the Buyer is obtaining finance for the property then it is necessary to register the financier’s interest on the policy. A certificate of currency lists the policy that is in place and the sum it is insured for. Most financial institutions require the property to be insured with their interest registered on the certificate of currency. You will need to advise your insurance broker or representative to complete this for you
