What insurance do I need when I sell my house?
Are you thinking about selling your home? Between choosing an agent, getting your home valued and stocking up on scented candles to woo potential buyers, you’d be forgiven for not having considered whether you need insurance to sell up.
While it’s true that we usually think about taking out insurance when buying a house – not selling one – there are two key forms of insurance it might be smart to consider when you put your house on the market.
Home Indemnity Insurance
When selling, house insurance can offer assurance to buyers and make them feel confident when going ahead with the purchase of your home.
To this end, home indemnity insurance is a form of protection against legal issues that may arise for the new owners of the property in the future – such as planning permission disputes, unresolved confusion over title deeds, access rights or ownership of extras, such as outhouses.
It’s especially recommended in cases when you’re selling your property but can’t locate a particular document – such as a letter from the Local Authority proving that the couple you originally bought the house from had permission to build that enormous conservatory back in the 1960’s.
By taking out a home indemnity policy as a seller, you’re assuring the buyer (and their mortgage lender) that any legal hiccups won’t cause them a financial loss months or even years after they buy your property.
Home Seller’s Protection Insurance
The process of selling a house doesn’t always run smoothly. Even if the process of completion has dragged on for months, there’s always a chance the buyer will pull out at the last minute.
Starting the selling process from scratch can be costly as well as frustrating. Home seller’s insurance is designed to protect the seller from unforeseen problems on the buyer’s end which result in the sale not going ahead.
Essentially, having a home seller’s insurance policy in place means that if a property transaction falls through due to circumstances beyond the seller’s control, the seller doesn’t lose the money they’ve already spent on the sale. This includes solicitor’s fees, conveyancer’s fees and other expenses which would otherwise be unrecoverable.
Home seller’s insurance can cover such costs if the sale falls through due to various common circumstances which can occur at any time during the process of selling a house. These include:
- The buyer pulls out after they get your property valued by a third-party for less than the offer they made to you, which you accepted
- Costly structural defects – such as rotten floor joists, ground subsidence due to tree roots or a roof that leaks – being identified following the buyer making a successful offer. Typically, these problems should require rectification totalling more than 10% of the offer price.
- The buyer is made redundant, has to relocate, becomes seriously ill or even dies, meaning the house sale is unable to go ahead.
Do I need to take out insurance when selling my house?
There is generally no legal requirement to take out insurance when selling a residential property. The exception to this is if the contract of sale includes the continuation of an existing policy to insure the property against loss or damage.
Despite it not being a legal requirement, it’s a smart idea to have insurance in place to reimburse you if something unexpected happens which derails your sale, meaning you and your family are covered.
The bottom line is – selling a home can be a stressful time and there’s a lot to juggle, but seller’s insurance can save you a real headache down the line. If you're interested in learning more about the services we offer, get in touch with a member of our team today.