Making enquiries regarding insurance early on saves you stress and potentially significant losses.
In all our correspondence we have with our purchaser clients we stress the importance of obtaining insurance prior to confirming all conditions in your agreement, especially if you are needing bank lending to complete your purchase. Obtaining insurance is something we encourage under your finance condition.
Banks and all other lending institutions require proof that you have the dwelling, retaining walls or other structures (carports, secondary dwellings and garages) fully insured before they advance loan monies. Without having suitable insurance lending is not available which leads to the importance of getting this sorted as early as you can.
Insurance has been a lot more difficult to obtain than it was historically with climate changes and severe weather patterns we are experiencing at times. The things that can impact you obtaining insurance are:
- Unconsented work carried out to the property
- Special land features council has noted with respect to the land
- Existence of Section 72 Certificate notifications recorded on the record of title (this is a notice from the local authority that the property is subject to natural hazards)
At times it may be best for you to approach an insurance broker to help you with insurance if any of the above apply. We have a lot of great contacts for people that specialise in this area so please get in touch if you would like us to connect you.
Our pointers for obtaining insurance are:
- When considering the sum insured it is important to consider the costs associated with demolition and removal of debris in the event of a fire and the rebuild of driveways, retaining walls, decks and fencing should the property suffer significant earthquake damage.
- Most insurance policies require you to specifically note any retaining walls to be covered in the event of a claim. Rebuilding of retaining walls that require consent from council are incredibly expensive so its best that this is specifically noted to avoid any problems in the future.
If you consider you need more information to establish the amount the property should be insured for in the above events we recommend consulting a professional to help you determine this. - Often when you purchase a property you are either provided a LIM report from the vendor or you obtain your own. A LIM report identifies any land features or special land features applicable to the property you intend to purchase and the surrounding neighborhood. Council continues to update these as each region has further climate change and severe weather patterns. It is critical that you specifically mention to your insurance company and have noted on any policy document land or special land features that are identified in the LIM report (these would likely be features such as historical or current slippages, sloping of the land and potential flooding).
- If the property has significant land or special land features it is always our recommendation to obtain insurance and not just rely on a quote prior to confirming your finance condition as satisfied or the agreement as unconditional.
- It is important you review the insurance policy documents to be fully aware of what you are actually covered for in the event of loss.
- Lastly, engaging a good insurance company is key! Quality is best, the AA Standard & Poor’s rating is important as is a history of paying claims without long winded waiting times.
Urban Property Law is not qualified to give insurance advice.
The above is intended for brief information only and it is recommended that you obtain professional insurance advice.
If you would like more information, please get in touch.