Insurance and Risk when buying property in Queensland.

I would like to raise the topic of Insurance and Risk when purchasing in Queensland.

DO YOU KNOW? When buying a property in Queensland the following applies:

The Property is at your risk from 5pm on the first business day after the Contract Date.

It is your responsibility to attend to any necessary insurance for the Property.

Please see below about insurance requirements:

Generally, it is recommended you make enquiries about insurance availability and cost before entering into a contract. Insurance can be expensive and, for some properties, may only be available in relation to certain risks. Despite the Property being at your risk, the Seller has an obligation until settlement to take reasonable care of the Property.

If the Property is damaged between the Contract Date and settlement (e.g. extreme weather event, fire or vandalism) you are still required to settle in accordance with the Contract (unless it is a dwelling or residential unit so destroyed or damaged as to be unfit for occupation). If the damage arises from the failure of the Seller to take reasonable care you may be able to seek compensation from the Seller.

If the Contract provides for risk to remain with the Seller until settlement you may still be required to settle in accordance with the Contract despite the damage (unless the damage is substantial or a residence is unfit for occupation). You are also unlikely to be able to make a claim on the Seller’s insurance or to insist the Seller make a claim.

If damage occurs, we recommend you obtain evidence of any damage (such as photos or video), including the source of the damage. In some circumstances you may gain the benefit of the Seller’s insurance by making a claim upon the Seller’s policy before taking early possession or completing settlement. We do not recommend that you rely upon this as:

a. the Seller may not take out insurance;

b. the Seller may cancel its insurance;

c. the event that causes the damage may not be covered; or

d. other factors may preclude recovery.

We strongly recommend that in all cases you take out insurance as advised below. You can arrange insurance by contacting an insurance broker or home insurance company directly. Advice on your insurance policy is outside the scope of our retainer.

If you are purchasing a residential house, not in a Community Titles Scheme, we recommend in all cases you arrange property insurance cover for house, contents and public liability.

If you are purchasing a lot in a Community Titles Scheme, please seek further advice.

If you are obtaining finance it will be necessary for your financier to be noted on the policy as mortgagee. Please arrange for your insurance broker or home insurance company to attend to this for you.

Source: Harmony Lawyers |© Lexon Insurance