In NSW the property is at the buyer’s risk from the day of exchange of agreements. It is also at the seller’s risk until completion. Both parties have an insurable interest between exchange and completion. It is not safe for either party to rely on fire insurance arranged by the other. An in­surance policy can be worthless it the insurance proposal form con­tains a significant false statement or if the premium is unpaid. If a building is accidentally damaged or destroyed after exchange and be­fore completion the seller can require the buyer to complete as if it had not been damaged or destroyed.

On completion, it is necessary that the lending institutions be satisfied that their interests as mortgages are covered by insurance for no less than the amount they specify. Therefore, it is necessary prior to com­pletion. to pay the first years premium and obtain a policy or a cer­tificate of currency showing the buyer as owners and the lending institutions as mortgagees. The buyer should check that his/her mortgagees approve his/her choice of insurance company.

Loss or damage as a consequence of burglary or housebreaking is commonly not covered if the buildings are not sufficiently furnished for full habitation. So if the buyer is moving house and leaves part of his/her furniture in one while he/she is in the process he/she will not usually be covered if the place is broken into and the contents stolen. If the buyer’s house is left uninhabited for more than the period specified in the pol­icy (usually 60 days. sometimes 30) the insurance cover in respect of certain events defined in the policy lapses unless he/she has obtained the prior written consent of the insurance company.

Buyers should check with their solicitor as to whether it is desirable to have any other form of insurance such as public liability.