When do you need to insure your new home?

You’ve done the hard work and you’re finally ready to buy your new home. Often, building insurance is a requirement of lenders (it’s a very good idea to have, regardless). But the question of when you need to have your building insurance sorted has proved to be a murky one. Is it by settlement? Or when you sign the contract?

The answer can depend on the state or territory where you live. It also depends on your contract. There can be a lack of specific legislation in certain states, so the information we’ve put together here is based on commonly used standard contracts. But, at the end of the day, whatever the buyer and seller agree upon and sign their names to is usually the ultimate decider.

When to take out home insurance

Queensland

You’ll need to talk to your solicitor or agent about when you become responsible for a home. But in Queensland the buyer generally becomes responsible from 5pm the next business day after both parties have signed the contract.

Therefore, if there’s damage to the property after 5pm the next business, the buyer is responsible for covering that damage.  

Find out more from the Queensland Government.

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New South Wales and Victoria

Unlike Queensland, in Victoria and New South Wales the buyer becomes responsible for any damage on the settlement date. Technically, the property is the responsibility of the seller up until settlement date, but it’s recommended that buyers get insurance from the time the seller signs the contract, just to be on the safe side.

While it’s not legally required, your mortgage lender may expect you to take out insurance before settlement.

Of course, the property needs to be handed over in the same condition as when it was sold (except for normal wear and tear). If you find that the condition of the property has changed since settlement, you can ask for a repair. That’s what pre-settlement inspections are for! It’s important to go through your contract and check everything is in the right condition. Don’t feel pressured to sign settlement documents without consulting your solicitor or conveyancer first.

Found out more about Victorian and New South Wales insurance rules.

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Tasmania, Australian Capital Territory and South Australia

The responsibility usually lies on the buyer, as opposed to the seller, during the settlement period in South Australia, Tasmania, and the Australian Capital Territory.

In these states (and territory) the buyer becomes responsible for any damage to the property on the exchange of contracts. So as the purchaser, it’s especially important to get your building insurance sorted before the contract date.

Western Australia and Northern Territory

In the Northern Territory and Western Australia, the buyer becomes responsible for the property on either the date the buyer is entitled to or given possession of the property or the date the whole of the purchase price is paid (the earlier of the two).

Organising insurance probably isn’t the most exciting part of buying a home. Imagining where your furniture will go, deciding who gets what room, and turning a house into a home are a little more exciting.

But getting in early and organising your insurance could help prevent any of your home-owning dreams from coming crashing down.

Whether or not you buy insurance when you are legally required to or earlier is essentially about how much risk you’re willing to take. In the grand scheme of things, the cost of a few extra weeks of home and contents insurance might be worth it for your peace of mind. Just remember to make sure you know what your policy does and doesn’t cover.

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Read more:

• The financial benefit of having home and contents insurance
• How to make a home insurance claim with Suncorp Insurance
• Flood resilience: Rebuilding after the 2011 Brisbane floods

Insurance is issued by AAI Limited ABN 48 005 297 807 trading as Suncorp Insurance. Consider the Product Disclosure Statement. The Target Market Determination (TMD) is also available. This advice has been prepared without taking into account your particular objectives, financial situations or needs, so you should consider whether it is appropriate for you before acting on it.