At a certain point in the property purchase process, the responsibility for that property is transferred from the seller to the buyer. So when should you, as a property buyer, take out insurance? It’s a common question for soon-to-be home owners, and here’s the simple answer: as early as possible. As soon as the property becomes your responsibility, those insurance needs will ideally be covered by your policies.
Think of it this way: if everything that could go wrong with your property does go wrong one minute after settlement, you’ll want to be confident you have protection in place!
What to consider: Home, contents and title insurance
Most first-time property buyers will know that they should look into insurance, but may not be sure of what they need to tick off the list. There are three main types of insurance to consider as you near settlement.
The first type, home insurance, is designed to provide cover for the physical structure of your property in the case of events such as fire, flood and storm damage. If you’re buying a strata property like an apartment, building insurance may already be covered by your compulsory strata insurance; you can check your pre-purchase strata report to be sure.
The second type, contents insurance, provides cover for the personal belongings you keep inside your home. Depending on the specific cover this might include things like TVs, computers, appliances, clothes, jewellery and tools.
The third type, title insurance, provides cover for common property ownership risks. This can provide cover in various circumstances such as:
• A discovery of renovations that were carried out by previous owners without council approval
• Previously undisclosed planning or zoning laws that determine you can’t live in your property
• Incorrectly calculated land tax, water rates, council rates or strata levy adjustments at settlement
• Fences that encroach on your neighbour’s property, or onto yours
• Structures built on your land without your knowledge or consent, and more.
Title insurance is a little different to the others in that it only takes a one-off premium to get cover for the entire time you own the property, while home and contents insurance will both require regular premium payments to maintain cover.
It’s never too late to get covered
You can take out title insurance at any time before or after settlement – even if you’ve owned your property for years. Cover will apply from the point of settlement – or from the point of purchase if you get cover after you buy – and will apply as long as you or your beneficiaries hold title to the property.
If you haven’t got title insurance in place for your new property yet, you can get a quick quote to see what the premium would be for your property. Or if you have your Contract of Sale, you can request cover now with First Title.