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BLOG: Take cover ahead of the stamp duty deadline

Written by: Sarah Watts
As the deadline for the stamp duty holiday nears, homebuyers are rushing to complete their house purchases before 31 March 2021.

Amidst this rush, buyers are likely to focus their efforts on the mortgage application process and getting their conveyancing searches completed in time, while leaving the issue of insurance until the end. However, insuring your new home is vital to the home buying journey and should be considered as soon as you know when you’ll be exchanging contracts on the property.

Between exchange and completion

Once contracts are agreed and become binding, the new owner takes on legal responsibility for the property, even if they won’t be living there for a few more weeks. This means that if your new home gets damaged after the date of exchange, for example due to a storm, flooding or fire, you’re still committed to buying it and will need to pay for the repairs. So, unless you can comfortably cover the cost of rebuilding or repairing your new property should an unexpected event happen, buildings insurance is essential.

Mortgage lenders will also usually insist that you have buildings insurance in place between exchange and completion. By not doing so, you could risk the mortgage falling through and compromising the entire purchase.

So, what insurance do you need?

Types of home insurance

There are several factors to consider when selecting the right policy buildings insurance policy.

Buildings insurance will cover the costs of repairing or rebuilding the structure of your home and will usually include outbuildings, fixtures and fittings, garages and domestic outbuildings, within the boundaries of your land. However, if you’re planning to renovate your new home or add an extension you will need to make sure your buildings insurer is aware before the work starts. Also, don’t forget to review your buildings insurance once all work has been completed, the cost of rebuilding your house may have increased.

If you already have buildings and contents insurance at your current address, you should also contact your insurer to see if you can transfer your cover to the new property. Getting in touch with your insurer as early as possible in advance of the expected exchange date will also mean you’re more likely to be covered from the day of exchange.

Homebuyers also need to consider the value of having cover in place to protect their possessions from loss, damage or theft once they move into their new homes. Many people can adopt a ‘it won’t happen to me’ attitude when it comes to thinking about any damage or loss to their valuables but insuring these items through contents insurance can save you time and money in the long run.

Finally, it’s important to check whether your current home insurance policy covers your possessions while they’re in transit between your old and new home. It may seem like a minor consideration, but the risk of damage to your possessions is rarely higher than on moving day. Contact your insurance provider early on as they will be able to explain what cover, if any, they provide for your valuables during removals. They may include moving within their policies as standard, or as an option. But it’s wise to check beforehand and whether there are any caveats to their cover.

Buying a new home is an exciting time, but it’s vital not to neglect protecting what is likely to be the most expensive purchase you will ever make. As people rush to complete purchases, home insurance should not be forgotten as it could have disastrous consequences.


Sarah Watts is head of intermediary at Legal & General Insurance, part of LV General Insurance Group

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