Insurance is an interesting proposition when progressing through a conveyancing transaction. The lawyers here at ClickLaw always recommend obtaining insurance when acting for a purchaser as soon as the contract has been exchanged.
Whilst in New South Wales, the Conveyancing Act 1919 provides that the passing of risk from the Vendor to the Purchaser does not occur until completion of the contract (or usually on early possession if the contract provides as such), there are some interestingly grey areas where the property may not be so substantially damaged so as to provide the purchaser with the right to rescind the contract but where the damage is still meaningful and potentially costly to repair.
A purchaser is generally entitled to rescind the contract if the property is substantially damaged and most prudent vendor’s will of course maintain an insurance policy over their property until completion. That said it is preferable in our opinion to take out insurance early to alleviate the grey areas and provide the requisite degree of certainty for the purchaser.
If you have any queries in respect of the above or the conveyancing process in general, please do not hesitate to contact one of the expert property lawyers here at ClickLaw.