Insurance is not one of the most exciting parts of owning a house.
But it is undoubtedly one of the most important.
So, can you sell a house without insurance?
Read on to find out.
Can you sell a house without insurance?
Yes, it’s technically possible to sell your house without insurance. But it can make the deal much more difficult.
Most banks require a house to have building insurance if they will lend on it (i.e., a mortgage).
If your buyer relies on a mortgage to make the purchase, they cannot proceed without this.
As a result, you could be asked to get building insurance. Whether you do so is up to you.
Cash buyers
Selling is still possible without insurance because you could sell to a cash buyer.
This individual or company isn’t answerable to a bank because they’re not using a mortgage to make the transaction. So, they can proceed even if you don’t have insurance.
What insurance might a seller want to take out?
Several types of insurance are available to property buyers.
This doesn’t always relate directly to the sale itself. But it can give you protection if something goes wrong in the interim.
Building insurance
As mentioned above, building insurance is one of the most important. It protects your building against damage.
Lenders often require this for properties on which they offer a mortgage.
Landlord’s insurance
You may also want landlord’s insurance if your house is being let out when you sell it.
This gives you protection against damage caused by your tenants.
And it’s possible that this could happen while you’re negotiating the sale. It saves you from being out of pocket.
Home indemnity insurance
Home indemnity insurance protects you against any losses relating to issues with your property. This could include:
- Structural problems
- Incomplete work
- Planning permission problems.
It can also protect you if something rears its head after the sale is completed and the new owner tries to sue you.
Home seller’s protection insurance
Home seller’s protection insurance covers your costs if the sale falls through.
Once again, this is not legally required but may be advisable if you think that there’s a chance of things collapsing.
They can assess your situation and advise which of these (if any) you need.
Circumstances when insurance is advisable
Each type of insurance for homeowners is helpful in certain circumstances.
Home seller’s protection insurance is most valuable if you think the sale has a high chance of collapsing.
Home indemnity insurance could be advisable if problems with the property are likely to arise.
Landlord’s insurance makes the most sense if you’ve got problematic tenants. Once they know that you’re selling, they may deliberately try to damage the property.
And building insurance makes sense if you want to sell on the open market to someone using a mortgage.
Many lenders insist on this. This could be needed if you want to sell to a young family starting their property journey.
Do I need insurance when buying a house?
Your lender may make it a condition that you take out building insurance on a property you’re buying.
Without this, they may withdraw the mortgage offer. You could feel compelled to do so in this scenario. Otherwise, the deal can fall through.
Do I need Homebuyer Insurance when purchasing a home?
Homebuyer insurance protects you against some of the risks involved with buying a property.
This might be:
- Legal disputes
- Problems with boundary lines
- Property title defects.
You aren’t required to take out homebuyer insurance. But some experts say it is advisable if you think that problems are likely.
It can give you peace of mind, especially during such a complicated and stressful period.
Who insures a house between exchange and completion?
Your official exchange of contract should specify this. Ask your solicitor to confirm.
On many occasions, the buyer is responsible once exchange date arrives. But there are exceptions to this.
You should thus double-check to be sure.
If you are buying the property and are responsible for getting house insurance between exchange and completion, make sure a policy is in place as soon as possible after the exchange.
You should also check with the insurance company to see if there are any exclusions or restrictions in the policy.
Sometimes, this could impact the coverage during the period between exchange and completion.
