- DaveMorroMember@davemorroJoin Date: 2004Post Count: 15
Yesterday i signed the contract for our first IP.
Cooling off finishes in 3 days and settlement not for about 6 weeks.
Just curious as to what stage to begin insurance on the property and what types of insurance are required.
DaveTzakiMember@tzakiJoin Date: 2003Post Count: 36
Insure from the date of settlement. You will need different insurance depending on the type of property, consult an insurance agent. Generally you will need landlord’s insurance as a minimum, then if it is a single house, property insurance as well, in addition; if you furnish the property then isure that too. If it is in a body corp, then the body corp usually insures the actual building, all you need to have is landlord’s insurance… my 3 IPs are in this situation, however I would consult with an isurance agent as they will tell you any insurance that is available for your particular circumstances.
Opportunity knocks softly, listen carefully!ginamarreeMember@ginamarreeJoin Date: 2003Post Count: 56
It has been my understanding that for your normal building insurance, you had to have that organised asap after both parties signed the contract( before settlement – regardless if it is a IP or PPOR)- I know most if not all financiers will require it, – this is in QLD mind you, – I dont know what the deal is with other states.
Good luck with first IP – I hope you have many more to come[thumbsupanim]
GinamarreeDerekMember@derekJoin Date: 2004Post Count: 3,544
Definately get insurance from the day your offer is accepted as you have a finacial interest in the property. This requirement is actually legislation in Qld and may also exist in other states – worth checkingout with the relevant authorities in your state.
At the very least get a cover note organised at time offer is signed off and at the latest when all conditions have been met.
Considering the costs involved ~15% of an annual insurance premium is cheap ‘insurance’ of your asset and ensure it will be in one piece when settlement is effected, or at least your financial interests are covered.
Why pinch pennies when insurance could save you thousands? For me the bigger picture is always more important.
Property Investment Support Available. Ongoing and never stopping. PM welcome.DerekMember@derekJoin Date: 2004Post Count: 3,544
And in Victoria,
Should I insure?
“You should think carefully about insuring property after you sign the Contract Note or Contract of Sale. A law called the Sale of Land Act says that you can pull out of the contract if the house is damaged and is “unfit for occupation”. To do this, there are technical rules about notifying the seller – it’s worth getting legal advice if this happens to you. Also keep in mind that the destruction must make the house uninhabitable. If it just causes damage – you may not be able to get out of the contract.
If you want to be absolutely sure that the property is insured and you are covered for anything that might happen, the best advice is to insure the property as soon as the Contract Note or Contract of Sale is signed. Other reasons for taking out your own insurance are:
* the mortgage documents can insist you take out insurance; and
* you might not be able to check the seller’s policy, and it is unwise to rely on the seller’s word that the level of insurance covers the value of the property.”
Property Investment Support Available. Ongoing and never stopping. PM welcome.DaveMorroMember@davemorroJoin Date: 2004Post Count: 15
Thanks for your replies, always appreciated !!
I’ll have to look into the regulations in SA
DavemelbearMember@melbearJoin Date: 2003Post Count: 2,429
If it were me, I would take out insurance from date of exchange no matter where you are. It’s ‘peace of mind’.
I was speaking to an agent friend of mine yesterday, and he bought a house (I think OTP), because he’s settled, but onsold, which will settle in about 4 weeks.
NRMA gave him a cover note, but when he went in to pay, they asked was he living there. When he said no, it’s vacant, and will be sold within a month, they refused to insure him – too much risk. They’ll honour the cover note, but won’t insure. Not sure about other agencies, but in light of the ‘grey area’ over whose responsibility it is – noting that by the contract you have to settle (and what Derek pointed out was new to me), I suggested he talk to his buyer, and even offer to pay the month’s worth of insurance if they hadn’t yet taken out a policy – to make sure the house was covered.