Buildings Insurance Before Exchange

Buildings Insurance Before Exchange: When Does Cover Start?

Most buyers expect to arrange home insurance when they collect the keys. However, for many property purchases in England and Wales, buildings insurance should start from exchange of contracts.

This is because the buyer may become responsible for the property once contracts are exchanged, even though the seller is still living there and completion has not happened.

Simple answer: Arrange the policy before exchange and ask the insurer to start cover on the exchange date. Your conveyancer should confirm when responsibility passes under your particular contract.

This guide focuses mainly on England and Wales. Scotland generally uses the conclusion of missives, while Northern Ireland has a different conveyancing process.

Why Is Buildings Insurance Needed From Exchange?

Before exchange, the buyer can normally withdraw from the purchase in England and Wales. After exchange, the buyer and seller are legally committed to complete on the agreed date.

Depending on the purchase contract, the buyer may still have to complete if the property is damaged by a fire, flood, storm, escape of water or another insured event between exchange and completion.

The seller may continue their existing insurance, but that does not necessarily protect the buyer’s legal or financial interest. The buyer should arrange their own cover where the contract places the risk on them.

Important: Do not assume the seller’s policy will pay you or allow you to make a claim. The policy belongs to the seller and may have different conditions, exclusions or insured amounts.

Exchange, Completion and Insurance Dates

Home-Buying Stage	What Happens	Insurance Position
Offer accepted	The purchase is progressing but is normally not legally binding.	Start comparing policies and checking whether the property is insurable.
Before exchange	Legal, mortgage and survey checks should be completed.	Obtain a confirmed quote and agree the intended start date.
Exchange of contracts	The buyer and seller become legally committed.	Buildings insurance will commonly need to start from this date.
Completion	Ownership transfers and the buyer receives the keys.	Buildings cover continues and contents cover may also be required.

Who Arranges Buildings Insurance?

Property Type	Who Normally Arranges Cover?	What the Buyer Must Check
Freehold house	The buyer normally arranges the policy.	Start date, rebuilding cost, lender requirements and exclusions.
Leasehold flat	The freeholder, landlord or managing agent usually insures the building.	Block-policy details, insured amount, excesses and premium contributions.
Share of freehold	The freehold company or owners may arrange a shared block policy.	Confirm the policy is active and acceptable to the mortgage lender.
New-build home	Responsibility depends on the developer’s contract and construction stage.	Ask when risk passes and when your own policy must begin.
Shared ownership	The housing provider commonly arranges buildings insurance.	Check the lease, service charge and insurance summary.
Cash purchase	The buyer normally arranges cover for a freehold house.	Insurance is still important even though there is no lender requirement.

Buildings Insurance for a Freehold House

If you are buying a freehold house, you will usually be responsible for arranging buildings insurance.

The policy should normally cover the main structure and permanent fixtures, which may include:

Walls, roof and foundations.
Fitted kitchens and bathrooms.
Built-in cupboards and permanent fittings.
Garages, sheds and outbuildings where included.
Underground pipes, drains and cables where covered.
Boundary walls, gates and fences where included.

Check the policy wording because not every insurer provides the same cover for gardens, driveways, outbuildings, boundary structures or underground services.

Buildings Insurance for a Leasehold Flat

For most leasehold flats, the freeholder or managing agent arranges a single buildings insurance policy for the entire block. Leaseholders contribute towards the premium through the service charge.

Your conveyancer should check:

Who arranges the block insurance.
Whether the current policy is active.
The total building sum insured.
Whether your mortgage lender’s requirements are satisfied.
Policy excesses, particularly for escape-of-water or subsidence claims.
Whether cladding or building-safety risks affect the cover.
How the premium is divided between leaseholders.
Whether any claims are outstanding.

You will not normally need to buy a separate buildings policy for the flat if adequate block insurance already exists. However, you may still need contents insurance for your belongings and cover for improvements not protected by the block policy.

Buildings Insurance for a New-Build Property

A developer may remain responsible for insuring a new-build property while it is under construction. Responsibility may pass to the buyer at completion, on notice to complete or at another point stated in the contract.

Do not assume that the developer’s insurance or new-home warranty replaces buildings insurance.

A structural warranty may cover specified construction defects for a defined period. Buildings insurance covers insured events such as fire, flood or storm damage, subject to the policy terms.

Before exchanging on a new build, ask your conveyancer to confirm:

Who insures the property during construction.
When responsibility passes to you.
Whether the property has a recognised structural warranty.
Whether your mortgage lender accepts the warranty provider.
When your personal buildings policy must begin.

Who Does What Before Exchange?

Person	Responsibility
Buyer	Obtains the insurance quote, checks the cover and pays the premium.
Conveyancer	Checks the contract, confirms when risk passes and reviews leasehold insurance information.
Mortgage lender	Sets minimum buildings insurance requirements for the mortgaged property.
Mortgage adviser	May explain lender requirements but does not replace the conveyancer’s contract checks.
Surveyor	May provide a rebuilding-cost estimate and identify defects affecting insurance.
Insurer	Assesses the property information and confirms the policy terms, premium and exclusions.
Seller	Should normally keep their existing insurance active until completion.

How Much Should the Property Be Insured For?

The buildings insurance amount should normally reflect the rebuilding cost, not the property’s purchase price or current market value.

The rebuilding cost is the estimated cost of demolishing and reconstructing the property, including materials, labour, professional fees and site clearance.

Example

You may buy a property for £450,000 because of its location and land value, but its estimated rebuilding cost could be £275,000.

Alternatively, a listed, unusual or remote property may have a rebuilding cost that is close to or higher than its market value.

Your lender’s valuation or property survey may contain a rebuilding-cost figure. Some insurers also use an automatic bedroom-based or unlimited rebuilding limit.

Buyer check: Do not enter the mortgage amount or purchase price as the rebuilding cost unless the insurer specifically requests it.

What Does Buildings Insurance Usually Cover?

Cover varies between insurers, but a buildings policy may include damage caused by:

Fire and smoke.
Flooding.
Storms.
Burst pipes and escape of water.
Subsidence, landslip or ground movement.
Theft or attempted theft.
Vandalism.
Falling trees.
Vehicle impact.

Every policy has conditions, limits and exclusions. A policy may not cover gradual deterioration, poor maintenance, pre-existing damage, defective workmanship or problems already known when the policy was purchased.

Important Insurance Checks Before Exchange

1. Confirm When Risk Passes

Ask your conveyancer whether you become responsible from exchange, completion or another contract date.

2. Obtain Quotes Early

Do not wait until the planned exchange day. Insurance difficulties can reveal wider concerns about flood risk, subsidence, construction type or previous claims.

3. Give Accurate Property Information

Tell the insurer about the construction, roof type, flood history, subsidence, listed status, nearby water, planned building work and whether the property will be empty.

4. Check the Rebuilding Cost

Use the rebuilding estimate from the survey or lender valuation where appropriate, rather than relying on the purchase price.

5. Review the Excess

The excess is the amount you pay towards a claim. Some policies have higher excesses for subsidence, flooding or escape-of-water claims.

6. Check Mortgage Conditions

Your mortgage lender may require cover for particular risks and may set conditions relating to the insurer or policy.

7. Confirm the Start Date in Writing

Keep the policy schedule or confirmation showing that cover starts on the required exchange date.

8. Do Not Cancel the Policy After Exchange

Keep buildings insurance active until you sell the property or another responsible party formally takes over the cover.

What If the Property Will Be Empty?

Standard home insurance may restrict cover if the property is unoccupied for longer than the period stated in the policy, commonly around 30 or 60 days.

Tell the insurer if:

The seller has already moved out.
There will be a long gap between exchange and completion.
You will not move in immediately.
The property is awaiting renovation.
Utilities will be disconnected.
The property is a probate or repossession purchase.

The insurer may apply conditions such as regular inspections, keeping heating at a minimum temperature, draining water systems or securing doors and windows.

What If You Plan Major Renovations?

A standard buildings policy may not cover major structural work, extensions, roof replacement or a property that is not safe to occupy.

Tell the insurer about planned work before buying the policy. You may need renovation insurance, unoccupied-property insurance or additional liability cover.

Also confirm that the contractor has appropriate public liability and professional insurance. The contractor’s insurance does not automatically insure your entire property.

What Happens If the Property Is Damaged Before Completion?

If serious damage occurs after exchange but before completion:

Contact your conveyancer immediately.
Notify your buildings insurer as soon as possible.
Do not negotiate directly with the seller without legal guidance.
Do not cancel completion or withhold money without your conveyancer’s advice.
Keep photographs, reports and correspondence relating to the damage.

The contract, insurance arrangements and cause of the damage will affect what happens next. Depending on the contract, the buyer may still be required to complete even if the property has been damaged.

Buildings Insurance vs Contents Insurance

Buildings Insurance	Contents Insurance
Covers the structure and permanent fixtures.	Covers belongings such as furniture, clothing and electronics.
May be required by a mortgage lender.	Is normally optional but highly useful.
Commonly starts from exchange for a freehold house.	Can start when belongings are moved or according to the policy.
May be arranged through a block policy for flats.	Usually arranged separately by the flat owner.

If you are using a removal company, check whether your belongings are covered during packing, transport and temporary storage.

Common Buildings Insurance Mistakes

Waiting until completion day to arrange cover.
Assuming the seller’s policy protects the buyer.
Using the property price instead of the rebuilding cost.
Not declaring flood, subsidence or previous damage.
Failing to tell the insurer that the property is empty.
Buying duplicate buildings insurance for a leasehold flat.
Assuming a new-build warranty is the same as home insurance.
Choosing a policy only because it has the lowest premium.
Ignoring large excesses and important exclusions.
Starting cover before knowing the actual exchange date.

Buyer’s Buildings Insurance Checklist

Ask your conveyancer when responsibility for the property passes.
Confirm whether you need individual or block buildings insurance.
Obtain quotes before the proposed exchange date.
Check the rebuilding cost.
Declare the property’s construction and known risks accurately.
Tell the insurer if the property will be empty or renovated.
Review the excesses, exclusions and claim limits.
Check the policy meets the mortgage lender’s requirements.
Arrange cover to start from exchange where required.
Keep written proof of insurance.
Give the policy details to your conveyancer if requested.
Do not authorise exchange until suitable cover is available.

Final takeaway: Arrange buildings insurance before exchange, not after it. Confirm the exact start date with your conveyancer and make sure the policy matches the property, contract and mortgage requirements.

Buildings Insurance Before Exchange