Question Regarding Building Insurance

[macca446]

Hi all,
If my property is sold and has gone unconditional do I still need to have building Insurance cover and is it up to the buyer to insure it.

Macca446

 

[Macca]

I would ! Peace of mind is important to me and there is too much money involved to argue if something went wrong and it burned down.

 

[Scott No Mates]

If it burns down before settlement, what is the purchaser going to say? Hmmm not quite as I remember it/nothing like the photos?

The answer does vary from state to state but generally the purchaser does not have an insurable interest in the property (they aren't on title until settlement), even with a caveat only serves to advise anyone searching the title that they will require clearance from a caveator before anything can be done with the land.

 

[EN710]

Hi all,
If my property is sold and has gone unconditional do I still need to have building Insurance cover and is it up to the buyer to insure it.

Macca446

I'll keep it until it's totally the buyer's problem

 

[macca446]

Ok thanks I will wait till after settlement takes place.

Thx

 

[Of The Vultures]

generally the purchaser does not have an insurable interest in the property

Really? Then why are purchasers advised to take out insurance as soon as the contract is signed? They do have a financial interest in the property, and as such I would imagine an insurable one too.

In any case, as the vendor I would still keep the insurance until after settlement.

 

[Perp]

If it burns down before settlement, what is the purchaser going to say? Hmmm not quite as I remember it/nothing like the photos?

Still obliged to complete.

The answer does vary from state to state but generally the purchaser does not have an insurable interest in the property (they aren't on title until settlement), even with a caveat only serves to advise anyone searching the title that they will require clearance from a caveator before anything can be done with the land.

I don't think this is quite right. The Insurance Contracts Act 1984 (Cth) ss 16 and 17 changes the common law and states that an insurable interest is not required, only that the insured is vulnerable to suffering a "pecuniary or economic loss" by destruction of the insured property. Purchasers fall into this category. In the period between the contract becoming unconditional and settlement, claims will generally be made against the policy of a purchaser, but the vendor would obviously be wise to retain their own insurance in case the purchaser's insurance is not valid for some reason.

Great summary here: http://www.bnlaw.com.au/content/Document/insurable_interest.pdf

Really? Then why are purchasers advised to take out insurance as soon as the contract is signed? They do have a financial interest in the property, and as such I would imagine an insurable one too.

In any case, as the vendor I would still keep the insurance until after settlement.

Good move!