Do I need to keep the property I’ve just bought insured until settlement?
Property Insurance – Who is responsible for what and when?
Settling your home is a wonderful time but there is so much to think about and sort out that one very important issue is sometimes overlooked...insurance.
Who is responsible for the property insurance for the period from signing the contract until settlement?
In Queensland, as different from some other Australian States, the standard terms of a sale contract usually provide for the risk in a property to pass from the seller to the buyer, not from the settlement date, but from 5pm on the first business day after the date that the seller signs the contract. These standard provisions are contained in the “fine print” of the contract.
What does this mean for the seller?
Despite the contract providing for the property to be at the buyer’s risk before settlement as stated above, it is always recommended that a seller maintains their insurance policy until following settlement in the event that the buyer does not insure the property and there is a loss. A seller has a continuing obligation until settlement to take reasonable care of the property.
What does this mean for the buyer?
A buyer should insure their property as soon as they are aware that the seller has accepted their offer, even if it is just a verbal acceptance.