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There’s lots to think about when buying a house, and with it being such a significant purchase, protecting it with the right insurance coverage is a vital aspect of homeownership. When it comes to property insurance requirements during the sale of a home, it varies across each state and territory.

In states and territories such as Queensland, South Australia, Tasmania and the ACT, the real estate contracts are less favourable to buyers, suggesting that buyers obtain insurance prior to the property settling. If you’re applying for a home loan, both you and the lender have a financial interest in the property and the lender may want to see that the building is insured after you’ve signed your contract. In any case, you should speak with your solicitor about the risks associated with your real estate contract and property insurance.

Queensland

Under a standard real estate contract, clause 8.1 states that the buyer is liable for the property from 5pm the next business day after signing a contract. Upon signing a contract, the seller may have the right to exercise this clause in the event of damage to the property.

South Australia

Under a standard real estate contract, it states that the property will be at the risk of the buyer from the date of this contract, meaning that the buyer is obliged to meet the cost of any repairs or loss (including but not limited to) any electrical, mechanical or structural problems existing after the date of the contract. The seller will reasonably maintain and use the property until settlement but is not liable for repairs or breakdown costs unless caused by the seller's negligence. The buyer purchases the property subject to the notified works in the agreed schedule.

Tasmania

A standard real estate contract states that both seller and buyer should insure the property from the contract date.

Australian Capital Territory

A standard real estate contract states that some risks associated with the property will pass from the seller to the buyer from the date of the contract. An exception is if this property is a unit - the buyer should take out insurance on the property on the date of the contract.

Victoria, New South Wales, Western Australia and Northern Territory

In these states, home insurance is not legally required by the real estate contract until settlement. However, if you're taking out a mortgage to buy your property, most lenders will insist on a comprehensive home insurance policy. This ensures their interest in the property is safeguarded in case of damage or loss. From settlement, when the property becomes yours, you're responsible for damages to the home; however, you may wish to insure the property before settlement in cases where you're not sure if the seller has a current insurance policy.

More information from these helpful Government sites can be found below:


Regardless of the legal obligations, homeowners should carefully assess the potential risks in their region and choose insurance policies that offer comprehensive protection against natural disasters, theft, and other unforeseen events. Consulting with insurance professionals and understanding the terms and conditions of the policies will help homeowners make informed decisions and safeguard their valuable investments. Remember, being proactive about home insurance can provide much-needed peace of mind for you and your family.

Ray White has a team of insurance professionals who can talk to you about Ray White Insurance which is underwritten by Allianz. If you buy a property through Ray White, you may be eligible to receive a complimentary settlement cover period. Speak to our team to find out more, visit raywhiteinsurance.com.au call 1300 729 944.

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