Insurance for property upon exchange of contracts if you have a long stop completion contract for a property you are buying
If you are buying a property with a contract using a long stop completion date you need to have an insurance policy which is flexible enough to accommodate your own situation. It seems that long stop completion date contracts are being used more regularly and the insurance situation is often misunderstood, misinterpreted or unavailable from your usual insurance provider.
Buying an existing property
If you are buying a property on the open market (not from a new house builder) and your solicitor has recommended a contract with a long stop completion date then (unless specified to the contrary) you will still need to insure the property from the date of exchange. Typically, if the period between exchange and completion exceeds 30 days then mainstream insurers will not provide cover for you. The contract still states that you need to insure the building so you need to find a policy that can provide this. Bickers Insurance Services can offer a policy for you in this situation and the type of policy will depend on the length of time between exchange and completion, the time specified by the long stop completion contract and whether the vendors will remain living at the property. Usually (subject to the notice period) with a long stop completion, the completion date may alter and your buildings insurance will need to be flexible enough to cater for this.
Buying from a developer
If you are buying a new build property from a developer and they have specified a long stop contract, usually they will have Contract Works cover (part of a Contractors All Risks policy) which should cover the property between exchange and completion. In this situation you will be required to cover the property from the completion date rather than the exchange date. Some developers will differ however so you will need to be sure exactly who is responsible (under the terms of the contract) for the property insurance between exchange and completion. In the case of a small developer building a single house or two, they may not have Contract Works cover so you need to make the necessary enquiries as to the extent of their insurance. Mainstream insurers will not usually provide cover for property that is not complete so you will need a specialist policy. Please give us a call or complete the online enquiry form and we will get back to you as soon as we can. Developers will often use a revised form of the the standard contract for buying / selling a property which is the Law Society Standard Conditions of Sale (5th Edition) which requires the vendor to insure the property from the date of exchange.