Matthew Ashton

Written by

Matthew Ashton

Reviewed by William Cooper

5 minute read

Updated 10th October 2024

At exchange or completion – when should I arrange high value home insurance?

If you’re buying a house with an above-average market value, taking out high-value home insurance should be at the top of your to-do list. But the question remains: when should you get this done?

Having high-value home insurance cover in place during the home-buying process can protect your new property between exchange and completion should something unexpected happen.

This article covers when to get home insurance when buying a house. Should it be at exchange or at completion?

When is the best time to arrange high-value home insurance in the house-buying process?

You may be wondering when to insure a house during the buying process. The ideal time to purchase high-value home insurance is before exchanging contracts when the sale becomes legally binding, not once you have moved in. After the exchange, you are legally committed to buying the new home and are liable if anything goes wrong.

Also, it’s a good idea to start shopping around for home insurance once the seller accepts your offer on the property. This will give you plenty of time to compare different policies and choose the one that best suits your needs. You can select the policy start date to ensure that the property is covered from day one, and to avoid any delays in the home-buying process or the risk of your mortgage not being approved.

Common questions about when you should and need to get home insurance

While your solicitor or conveyancer handles all the legal paperwork and contracts required to buy a home, home insurance is often the buyer’s responsibility. Here are four important questions to consider when buying home insurance.

Is it a legal requirement?

Home insurance is not a legal requirement. However, most lenders will require you to have appropriate insurance in place when buying a house as one of the conditions of sale.

Even if you don’t require a mortgage, home insurance should still be considered an essential purchase unless you can independently afford to cover the full cost of repairing or rebuilding your home, including removal of debris and professional fees. Your solicitor may also ask you to provide proof that the home is insured, as the standard conveyancing wording by the Law Society in the Standard Conditions of Sale (fifth edition) places the responsibility of arranging insurance between exchange and completion on the property purchaser.

Is it needed before my mortgage offer?

You don’t typically need to have high-value home insurance before you have your mortgage offer. However, it’s common for mortgage lenders to want proof that you have appropriate insurance as part of their checks before finalising their mortgage offer. It is, therefore, a good idea to have a confirmed quotation in place, ready for exchanging contracts.

Can I transfer my existing insurance policy?

Your new home’s size, location and potential rebuild cost may differ considerably from your previous property, so the existing policy may not adequately cover it. You have several options at this point and depending on the right choice depends on your circumstances:

  • Contact your existing home insurance provider to ask them to temporarily add a second address during the exchange to completion process – usually chosen if there’s a significant gap between exchanging and completion of contracts. Or,
  • Complete a change of address immediately – usually chosen if you’re completing and exchanging on the same day. Or,
  • Take the opportunity to look for new high-value home insurance options for the new purchase property, then cancel the old insurance policy on the day of completion, for the previous address

Changing an address on an existing policy can take as long as looking for a new option, so looking around may not cost you any more time and be beneficial. Whilst many high-value home insurance products offer a pro-rata cancellation (meaning you only pay for the time you’ve been on cover), you still want to watch for any cancellation fees before choosing to switch providers.

When should I cancel my old insurance?

Once you have completed the purchase of your new property, you should cancel your previous home insurance (assuming you’ve sold that as part of the move). If you’ve sold your previous property, you don’t need to keep your old insurance in place, as your former home now belongs to someone else.

Essentially, you cannot insure a property you have no insurable interest in, and there’s no value in insuring the same property through two different providers. We’d always recommend waiting until all contracts are signed and you’ve picked up the new house keys before cancelling any policies. A high-value home insurance policy is quick to cancel but cannot be easily reversed.

Who is responsible for any damage between exchange and completion?

Between the exchange and completion of buying a home, the new buyer, legally, owns the new property, and unless explicitly expressed otherwise in legal contracts, is typically responsible if it is damaged or requires repairs, such as if a storm damages the roof, a window breaks or a fence is blown down.

The seller is obliged to inform you of the damage. However, it’s usually the new buyer’s responsibility to carry out the repairs which makes arranging high-value home insurance during this time is crucial to cover any potential issues.

It must be said that this can vary depending on the agreement between the buyer and seller, which will consider situations like delays between exchange and completion or if the property is unoccupied – check your legal documents. That said, arranging insurance as the buyer is still strongly recommended as this will act as contingent cover should the seller’s insurance, for whatever reason, not commit to settling a claim.

How to get insured before the exchange date

Protecting your new home with high-value home insurance on the exchange date requires several key steps:

Gather property information: Get detailed information about your new home, such as the year it was built, the materials used in construction, and any previous history of structural issues.

Assess your needs: Consider the value of your new home and any unique features, such as high-end finishes, valuable artwork, or antiques.

Select the right broker: A broker such as Stanhope can help you identify the most competitive high-value home insurance by using its extensive industry knowledge and exclusive access to the top insurance products. Not all high-value home insurance policies are the same, so we will help you compare coverage limits, exclusions and any additional benefits to find the right policy for you. See our top tips for selecting a broker here.

Secure your insurance cover: Once you’ve chosen the most appropriate high-value home insurance policy, make sure that your cover starts on the exchange date to avoid any gaps in protection during exchange and completion.

Confirm with your lender: Your mortgage lender may ask for proof of your new home insurance policy to check whether it meets their criteria and to enable them to finalise the mortgage.

You should now have a clearer picture of when to secure insurance for your high-value home. As one of the UK’s leading providers of high-value home insurance, Stanhope can help you secure bespoke cover for your high-value home.

We are dedicated to providing tailored insurance solutions that meet our customers’ unique needs and circumstances. Using our extensive experience of the high-end insurance market, we can help you choose the right policy at the right time. Contact us today for a quote.

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Sources

https://moneytothemasses.com/quick-savings/insurance-2/home-insurance/when-should-you-get-home-insurance-when-buying-a-house

https://www.comparethemarket.com/home-insurance/content/buildings-insurance-between-exchange-and-completion/

https://www.moneysupermarket.com/home-insurance/home-insurance-when-buying-a-house/

Written by Matthew Ashton

I started working in the insurance industry in 2004. Four years later, I left to focus on theological studies, working as a youth worker and then as a ministry director in Seattle, USA. When returning to the UK, I had an opportunity to work for the late Andrew Marchington. I joined his firm as a sales advisor when it had around ten staff members. Within three years, I was Head of Ops with a staff team of over 30 people. After a chance encounter in 2019 with Rachel Living and Will Cooper, I co-started Stanhope to build a high-value home, luxury watch, and jewellery broker synonymous with trust. I love being with Donna, my wife, and four kids when not working, cramming in the odd row, or run when I can. I am fortunate to love what I do and consider it a blessing to grow the Stanhope brand.

Matthew Ashton

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