Buying a residential property can bring with it a whirlwind of nerves, frustration, excitement, and hopefully, ultimate joy. Often a complicated and drawn-out process, purchasing property also comes with a host of insurance-related implications, and ones well worth preparing for in advance. Having recently purchased a property of my own, I’ve collated 4 top tips for reducing risk and getting your insurance organised ahead of settlement.
1. ALWAYS START WITH A BUILDING INSPECTION – The real estate version of a test drive
You’ve fallen in love with a property and you’re considering making an offer. What’s next? Rather than making an immediate offer, wherever possible, engage a building and pest inspection service as early in sale negotiations as you can. A building inspector will review the property for evidence of existing structural damage, or evidence of conditions that may lead to structural damage in the future.
All qualified building inspectors must have a Professional Indemnity (PI) policy in place. This means that in the instance of finding structural damage in your new home in the future (that was not originally identified in the inspection report), you may be able to make a claim against your building inspector’s PI cover.
2. GET YOUR HOME INSURANCE TIMING RIGHT
Once you’ve progressed to the point of signing a contract with the vendor, it’s time to think about home insurance. Depending on the location of your property, the timing of when you become responsible for any damage to the property will vary – always check this ahead of time. As a general rule however, you should purchase a home insurance policy as soon as you can after the contract is signed. Your lender may even require you to do this before your home loan becomes unconditional.
3. IS THE PROPERTY IN A STRATA PLAN?
If the property is located within a Strata Plan, it is usually the responsibility of the Owner’s Corporation to take out a Strata Insurance policy to cover the building or common property that forms part of the Strata Plan. The Strata Insurance policy should be in place before the property is sold. If you’re unsure, check with the vendor or contact the property’s Strata Manager.
4. DO YOU NEED LANDLORD INSURANCE?
If your new property is an investment and you plan to rent it out, you should consider Landlord Insurance. Landlord Insurance covers your property as per a home insurance policy in addition to losses that may arise through the actions of your tenant/s (e.g. theft, loss of rent if the property becomes uninhabitable or malicious activity).
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To learn more about how Honan can assist you in managing your Property and Strata risks, please reach out at any time.
Operations Manager – Underwriting Facilities & Strata
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