Home insurance when buying or selling a house

Home insurance is an important policy to have, and it’s often a requirement of mortgage providers to have a policy in place. Whether buying or selling a home, it’s vital you know when you’re responsible for damage or loss to the property.

Home insurance is usually required by a mortgage provider when you buy a house. It protects the structure of the property from damage or incidents such as fire and flood.  

If you are buying, it’s advisable to have home insurance in place when you exchange contracts or until the sale is completed if you are selling. 

When you exchange contracts, this is the time when the buyer legally commits to purchasing the new home and therefore should take out insurance to cover it too. 

It’s a good idea to get it arranged well in advance though, as you don’t want to risk your mortgage not being approved or delays to the process.

Home insurance covers you if something happens to your property and it’s made up of two parts. You can buy separate buildings and contents insurance policies, from different insurers, or you can buy a combined policy. 

Buildings insurance covers the structure of your property - the bricks, mortar, fixtures and fittings - and anything that can’t be removed from it. 

Contents insurance covers everything inside the home, including all of your belongings.

Buildings insurance is not legally required, but your mortgage provider may insist on having it in place, and some won’t approve a loan without seeing evidence of the policy first. 

Contents insurance is not a legal requirement either, but it is a useful tool for protecting your belongings. You can also pay an extra fee to cover them when you’re out of the home too.

If you are buying a new home, you should arrange to have buildings insurance in place from the moment you exchange contracts. This is the point at which you legally become responsible for the property.

You don’t have to buy insurance on the day, you can find a policy in advance and start it on the day of exchange.

If you are selling your home, you are responsible for it until the sale is completed. This means you should keep your home insurance policy in place until this point. You can ask your insurer to end the policy on the date when you complete the sale.

After you have completed the house sale, you can cancel your home insurance. You don’t need to keep it in place after this point, as the house now belongs to someone else and this means you no longer have an insurable interest.

You could either cancel the policy completely or you may decide to move it to your new home. 

If you move it, your insurer will need to carry out a new risk assessment on the new property. This may change the price you pay for your premiums, which could go up or down. If you move from a high-risk area to a low-risk area, for example, your policy could get cheaper.

If you’re buying a new place, it’s important to have insurance in place. The last thing you want after exchanging contracts is for the new home to be flooded or for a fire to happen, for example, as without cover you’ll be left paying for the repair work yourself.

You will also want to do this as soon as possible so you have time to compare policies and find the best one for you and your property. When you’ve found a policy you’re happy with, you can ask the insurer to start it from the day you exchange. 

If a property is damaged after you’ve exchanged contracts, but before the house sale is completed, it’s up to the seller to tell the new owner about the damage.

The buyer should have insurance in place from the date the contract has been exchanged so this can cover any claims or repair work.

You have the flexibility of choosing three levels of cover with John Lewis Home Insurance, so you can pick the policy most suited to the cover level you would like.

For all three tiers, (Bronze, Silver, and Gold) if you’re selling your home, the buyer is covered for any loss or damage caused by anything covered under the buildings section of the policy. This covers you for loss or damage that occurs between the date of exchange of contracts and completion of the sale. Therefore, you should keep this in place until you have completed the sale of the property.

If you’ve chosen the accidental damage add-on, you’re covered against accidental loss or damage when a professional removal firm is moving your contents from your home directly to your new permanent home, anywhere in the British Isles.

Insure your home and contents today by getting a quote online. For a higher level of cover, we also offer Specialist Home Insurance for unique homes and high-value contents.

Insure your home and contents today by getting a quote online.

For a higher level of cover, we also offer Specialist Home Insurance for unique homes and high-value contents.

John Lewis Finance, John Lewis Home Insurance and John Lewis & Partners are all trading names of John Lewis plc. Registered office: 171 Victoria Street, London SW1E 5NN. Registered in England and Wales (Registered Company Number 233462). John Lewis plc is an appointed representative of Munich Re Digital Partners Limited, a company authorised and regulated by the Financial Conduct Authority to carry on insurance distribution activities.

John Lewis Finance, John Lewis Insurance and John Lewis & Partners are all trading names of John Lewis plc. Registered office: 171 Victoria Street, London SW1E 5NN. Registered in England and Wales (Registered Company Number 233462). John Lewis plc is an appointed representative (Financial Conduct Authority no. 416011) of Covea Insurance plc which is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority (registration no. 202277). John Lewis Specialist Home Insurance is underwritten by Covea Insurance plc. Registered Office: Norman Place, Reading, Berkshire RG1 8DA. Registered in England and Wales (registration no. 613259).