Moving house is widely ranked as one of life’s most stressful milestones—somewhere between starting a new job and realising you’ve left the oven on. Amidst the chaos of packing boxes and chasing solicitors, it’s easy to assume that buildings insurance can wait until the day you get the keys. However, in the legal landscape of England and Wales, waiting until completion day is a gamble you don’t want to take. Here’s why securing house insurance on exchange of contracts is not just a good idea, but a legal necessity.
Why the risk passes to you at exchange
It’s a common misconception that the seller remains responsible for the property until they hand over the keys. In reality, once you “exchange contracts,” you are legally committed to purchasing the property.
In the vast majority of residential transactions in England and Wales, the contract incorporates the Law Society’s Standard Conditions of Sale (5th Edition). Under these terms, the legal risk passes to the buyer the second the contracts are swapped.
Specifically, Condition 5.1.1 states:
“The property is at the risk of the buyer from the date of the contract.”
This means if a fire were to break out or a pipe were to burst between exchange and completion, you—as the buyer—are still legally obligated to complete the purchase at the full agreed price. Without insurance, you would be paying full price for a damaged home.
What the seller’s obligations really look like
Many buyers assume the seller’s insurance will protect them until completion. While most sellers do keep their insurance active until they move out, the Law Society conditions are very clear: the seller is under no obligation to the buyer to insure the property unless specific, rare circumstances apply (such as the property being a leasehold where the landlord manages the block policy).
Even if the seller has a policy that claims to “extend benefit to the buyer,” you cannot rely on it. You have no control over whether their premiums are paid, whether they have disclosed relevant facts to their insurer, or if their policy limits are sufficient. Taking out your own policy is the only way to ensure your interests are fully protected.
Protecting your mortgage lender’s security
If you are buying with a mortgage, your lender has a significant financial stake in the bricks and mortar of your new home. For them, insurance isn’t optional; it’s a non-negotiable condition of your loan.
Most mortgage offers explicitly state that buildings insurance must be in place from the date of exchange. Your conveyancer will usually need to see proof of this cover before they can proceed to completion. If something catastrophic happens to the building and you aren’t insured, the lender’s security is gone, but your debt to them remains.
How to navigate price comparison sites
In the age of instant quotes, most of us head straight to price comparison websites. However, you must exercise caution during a house purchase.
Standard home insurance policies often ask for a “start date.” Many buyers mistakenly set this to their move-in date (completion). To be protected, you must set the policy start date to the estimated date of exchange.
- Temporary cover: If your move is particularly complex, some specialist insurers offer “Exchange to Completion” policies. These are designed specifically to bridge the gap if you aren’t ready to commit to a full annual policy yet.
- Accuracy is key: Ensure you are honest about the property’s state (e.g., if it will be unoccupied for a period between exchange and completion), as failing to disclose this could void your cover.
This guide is based on general principles of English and Welsh law, is intended for informational purposes only, and does not constitute legal advice or establish a professional relationship.
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