Insuring your property before you sell is not usually compulsory, but it can be advisable and useful for both the seller and the buyer. Property insurance protects a property against unexpected losses and can give the buyer peace of mind that the property is insured.
Here are some important considerations for insuring your property before you sell:
Existing insurance policy. The seller should check their existing property insurance policy to see if it covers any unsold property. If this is the case, it may cover the property until the sale is completed.
Buyer expectations. Buyers may wish to purchase an insured property, especially if they intend to take out a loan to buy. Having an insured asset gives them the security of knowing that there is protection in case of unexpected losses.
Protection for the seller. Property insurance can protect the seller against unexpected losses that may occur before the sale is completed. For example, water damage, fire or other accidents may occur that could affect the condition of the property.
Change an existing policy. The seller may consider amending the existing insurance policy to cover the property during the sale period. Some insurers provide temporary cover, which covers the period of sale.
Obligation to inform the buyer. If the seller has not insured the property and the buyer wants insurance, the seller may be obliged to inform the buyer and allow the buyer to buy the insurance policy on his behalf.
Overall, insuring a property before it is sold is not a legal obligation, but it can be a sensible precaution for both seller and buyer. An insurance policy can provide protection against unexpected disasters and help to ensure that the value of the property does not fall before the sale is completed. Before buying or changing insurance, it is advisable to consult an insurance broker or adviser for information and recommendations that are appropriate to your particular situation.