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Old 06-08-2010, 12:43 AM
The Chaser The Chaser is offline
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Insurance on vacant land and then house under construction

Hi all

Just wondering what insurance is required when purchasing a house and land package and when? I.e. the land will settle first with the developer and then the construction will commence with the relevant progress payments to the builder.

So do I need insurance on the vacant land - public liability risk perhaps - and are there insurers that even offer this type of limited product?

What happens during the building process? Am I covered by the builder's insurance and what is this type of insurance policy called, so that I can ask the builder to show me proof of its existence?

Hopefully that makes sense. Thanks.

Angela
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Old 06-08-2010, 08:10 AM
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Propertunity Propertunity is offline
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Angela, the builder's own insurance will cover you until handover. Only insure the building & contents at that point.

Yes, just like checking his licence, you are entitled to see his other policies in place before engaging him. Most companies are happy to show you this, some even have them on their web-site.

I've never heard of anyone taking out public liability insurance on vacant land before, but I'm fairly sure if you look hard enough you'd find an insurer willing to take your premium
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Old 06-08-2010, 09:52 AM
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Originally Posted by Propertunity View Post
I've never heard of anyone taking out public liability insurance on vacant land before, but I'm fairly sure if you look hard enough you'd find an insurer willing to take your premium
Thanks for the reply. From what I can work out any 'risk' would be mine after the date of the contract. So if say during the contract period or before the builder takes possession of the land for construction, someone walks on the land and trips and injures themselves they could sue me. Logic would suggest that surely nothing much could happen on vacant land but then I have been amazed by the ridiculous cases that the courts seem to entertain!

For this reason I thought I had read somewhere that I would need some sort of public liability insurance.
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Old 06-08-2010, 10:26 AM
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Originally Posted by Propertunity View Post
Angela, the builder's own insurance will cover you until handover. Only insure the building & contents at that point.

Yes, just like checking his licence, you are entitled to see his other policies in place before engaging him. Most companies are happy to show you this, some even have them on their web-site.

I've never heard of anyone taking out public liability insurance on vacant land before, but I'm fairly sure if you look hard enough you'd find an insurer willing to take your premium
The builders PL cover is covering the builder for their legal liability, not the property owners. The builder has a duty of care for their activities on the site, but that does not mean that there are no circumstances whereby the property owner is at risk.

As an example, the land owner fails to keep the grass down and a fire breaks out, damaging the neighbour's fence.
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Old 06-08-2010, 10:34 AM
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So Token Funder, what type of policy does she need? Would it just be PL?
Thanks.
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Old 06-08-2010, 12:33 PM
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So Token Funder, what type of policy does she need? Would it just be PL?
Thanks.
Yep. As I said, for most blocks in most circumstances the risk is low, it's just the case that it is not non-existent.

If I held a vacant block in a subdivision with lots of complete homes, kids looking for a fun place to play and it was going to be an extended period before contstruction began, I'd probably do it.

If it's vacant dirt surrounded by vacant dirt I'd be less concerned.
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