Insurance between exchange and completion

[bamberger]

I am advised that my solicitor will not exchange contracts until I (the buyer) have buildings insurance in place in case the property burns down between then and completion. While I would have thought that I was contracting to buy a house in a non burned state and if it did burn down I it would be the sellers problem to fix it, I'm not going to get anywhere without buying the insurance,which will in any case continue once completion has taken place.
However I could arrange the insurance on day1 in anticipation of exchange taking place a week later and then the whole thing could fall through. Would I get my money back in full or would I suffer a huge "admin" fee ? This falling through must, sadly, be quite common and with all the cash already shelled out on surveys, searchs etc I wouldn't want to lose even more. Naturally I hope all goes well but I'd like to know where I stand just in case it doesn't.
Thanks

[redcrx]

I've never heard of such a thing. How can you insure something that you don't own until completion?
Personally I'd tell them to lose themselves! :)

[ummmm]

As soon as you exchange contracts you are legally bound to go through with the purchase or face a very hefty penalty.

You can ask for a exact date of exchange and arrange the insurance for that date. You're going to need it anyway.

[redcrx]

but why insure a house that you dont own???

either side can pull out after exchange, there is no automatic penalty and its up to the agrieved party to chase for costs incurred to that date.

[bamberger]

Ummmm- yes but suppose that exchange is due to take place on 1 November and I buy a years buildings insurance for £300 on 23rd October to commence on 1 November.If it all goes horribly wrong on 30 October, will I get £300 back or be hit for an admin fee of (say) £100?

[redcrx]

why dont you call your current house insurance provider, or any if you dont have one, and ask if you can insure a property thatdoesnt belong to you yet.

[The Builder]

I understand Red's point about insuring something you don't own.......... in fact, by exchanging contracts, you kind of DO own it........... or, actually you've contracted to buy it come what may........ including burning down.
I've done this loads of times in my job.
Perhaps re-assuring when you really don't know FOR SURE if the present holder does have insurance. He might think he's off the hook after exchange.
I'm sorry I'm not really helping with the answer you want. This is why I've always used a Broker. They figure the best deal for you......... and arrange short term cover when needed.

[AlBags]

You can exchange contracts all day long, but until your money is accepted and you have posession, why should you?
Would you tax and insure a car before you paid and took delivery of it.
After contract, the seller is due to take reasonable care of your property (which is yours after sale)

[maclarencat]

I think it needs to be insured from a mortgage point of view. If you have a mortgage on a property it has to be insured or completion cannot take place as they wont release the mortgage money without the insurance in place. If it burnt down they would have no security on the loan.

[redcrx]

but mortgage money often isnt given until the contracts are completed, not at exchange