There is something distinctly odd about insuring a house that you do not yet own, cannot yet enter and may not move into for another fortnight. Yet that is exactly what many buyers need to do.
In an ordinary residential purchase in England and Wales, the risk of accidental damage to the property will usually pass to the buyer when contracts are exchanged, rather than when the keys are collected. So if the house is badly damaged during the gap between exchange and completion, the problem may already be yours.
That catches a lot of buyers by surprise. Understandably, most people think of completion as the moment the house becomes their responsibility.
Quick answer: For an ordinary freehold purchase, you should usually arrange buildings insurance before exchange and make sure the cover begins on the date contracts are exchanged. However, the actual contract matters, and different arrangements commonly apply to leasehold flats and some new-build homes.
This guide explains when house insurance should start, why exchange matters and what happens if something goes wrong before completion.
Jurisdiction: This guide covers residential property purchases in England and Wales. Scotland and Northern Ireland have different conveyancing systems.
Contents
- When should buildings insurance start?
- Why does risk usually pass at exchange?
- Is buildings insurance a legal requirement?
- What if the property is damaged before completion?
- Can I rely on the seller’s insurance?
- What cover do I need?
- What about a mortgage?
- Leasehold and new-build properties
- What if the property will be empty?
- Frequently asked questions
When should buildings insurance start?
For most ordinary freehold house purchases, buildings insurance should start on the day contracts are exchanged.
The sensible approach is to obtain quotes and choose a policy beforehand, so that cover can begin as soon as exchange takes place. Your conveyancer may also need to check that your arrangements satisfy your mortgage lender.
This does not usually mean starting the policy when you sign the contract. Signing and exchange are different things. You may sign your contract several days before your conveyancer formally exchanges contracts with the seller’s conveyancer.
It is exchange that normally makes the sale legally binding. My separate guide explains what happens when contracts are exchanged and why that stage matters.
If the proposed exchange date moves, tell the insurer. Exchange dates have a habit of changing, sometimes very late in the day.
Why does risk usually pass at exchange?
Many residential sale contracts incorporate the Law Society’s Standard Conditions of Sale. They are designed for residential conveyancing transactions, although they can be amended where the circumstances require it.
Where the standard position applies, the property is normally at the buyer’s risk from the date of the contract. In an ordinary transaction, that is the date contracts are exchanged.
The Law Society’s Standard Conditions of Sale provide the contractual framework used in many residential transactions.
This creates an unusual gap. You have committed yourself to buying the property, but you do not yet have the keys and legal ownership will not transfer until completion.
It is one of those points I remember buyers being genuinely surprised by. You can be carrying the financial risk of accidental damage before you have ever spent a night in the house.
The actual contract always needs to be checked. Special conditions can alter the standard position, so you should not assume that the general rule applies to every purchase.
Is buildings insurance a legal requirement?
No. There is no general law requiring every homeowner or cash buyer in England and Wales to have buildings insurance.
That is why it is misleading to describe buildings insurance from exchange as a universal legal requirement.
In practice, however, going without it can expose a buyer to a very substantial risk.
If the contract places the property at your risk from exchange and the house is seriously damaged afterwards, your obligation to complete does not necessarily disappear simply because the property is no longer in the condition you expected.
If you are buying with a mortgage, there is another consideration. Mortgage lenders will normally require suitable buildings insurance as a condition of the loan.
A cash buyer may not have a lender imposing that requirement, but the underlying risk of damage remains.
What if the property is damaged before completion?
A fire is the obvious example, but the problem does not need to be catastrophic. A storm might damage the roof, a pipe could burst, a tree could fall onto the building or an empty property could be vandalised.
Where the contract puts the property at the buyer’s risk, accidental damage after exchange will not necessarily bring the transaction to an end. The buyer may still be bound to complete and pay the agreed price.
That is the uncomfortable point at the heart of this subject. In principle, you could be committed to buying a property that has suffered substantial damage since you agreed the price.
Buildings insurance is intended to protect against insured risks of that kind. Whether a particular loss is covered will depend on the cause of the damage and the terms, exclusions and limits of the policy.
If significant damage does occur between exchange and completion, both parties should contact their conveyancers and insurers immediately. Do not assume that the sale has automatically fallen through or agree substantial remedial work before establishing the contractual position.
The seller also remains subject to their contractual obligations. Deliberate damage, removal of items that should remain at the property or some other breach by the seller raises different issues from an accidental insured event.
Can I rely on the seller’s insurance?
Not safely.
Many sellers sensibly keep their buildings insurance in place until completion. Indeed, the Law Society’s current explanatory guidance recommends that sellers do so because serious damage could affect the buyer’s mortgage funding.
But that does not mean the buyer should simply rely on the seller’s policy.
You are not normally the policyholder and may have no control over whether premiums have been paid, what exclusions apply or whether the insurer would meet a particular claim. The sale contract may also expressly provide that the seller is not required to insure for the buyer’s benefit.
The safer approach, where the contractual risk has passed to you, is to arrange your own appropriate cover.
This can mean that both buyer and seller have insurance relating to the property during the short period between exchange and completion. That is not in itself unusual.
What cover do I need?
The immediate concern at exchange is normally buildings insurance rather than contents insurance.
Buildings insurance protects the structure of the home and will usually cover things such as the walls, roof, floors and permanent fixtures, although every policy has its own terms and exclusions.
The government-backed MoneyHelper service provides a useful explanation of how home insurance works and what buildings insurance covers.
Insure for the correct rebuilding cost
The amount insured is not necessarily the price you are paying for the property.
A house worth £600,000 does not necessarily cost £600,000 to rebuild. Part of its market value may come from the land, location and local demand. Conversely, unusual or historic buildings can be surprisingly expensive to reinstate.
Your survey or valuation may contain a rebuilding figure. For more unusual properties, specialist advice may be appropriate.
Answer the insurer’s questions carefully
Insurers may ask about the property’s age and construction, previous flooding or subsidence, claims history, security and whether it will be occupied.
It can be tempting to rush through those questions when everybody in the chain is waiting to exchange. I would resist that temptation. If you do not know the answer to something important, find out or ask the insurer what information it requires.
You want a policy that will respond if something happens, not simply a certificate that allowed the transaction to proceed.
What about contents insurance?
Your furniture and belongings will usually remain in your existing home until moving day, so contents cover for the new property will commonly become relevant at completion or when your possessions are moved.
Some insurers can arrange a combined policy with buildings cover beginning at exchange and contents cover beginning when you move in. Check the dates shown in the policy documents rather than assuming both parts start together.
What about a mortgage?
If you are borrowing to buy the property, check the requirements in your mortgage offer.
Your lender’s security is the property itself, so it will normally require adequate buildings insurance. Your conveyancer may be acting for both you and the mortgage lender and will need to satisfy the lender’s requirements before completing the purchase.
Insurance difficulties should therefore be dealt with before exchange. If ordinary cover cannot be obtained because of flooding, subsidence, unusual construction or another problem, that may affect not only the cost of owning the house but also the mortgage.
Finding out that a property is difficult or exceptionally expensive to insure can itself be useful information before you become legally committed to buying it.
Leasehold and new-build properties
The usual freehold rule should not simply be applied to every purchase.
Leasehold flats
Most blocks of flats are insured under a single buildings policy arranged by the freeholder, landlord or management company. Leaseholders then contribute to the cost, usually through the service charge.
In that situation, taking out a separate buildings policy for the entire structure of your individual flat will normally be unnecessary. Your conveyancer should instead check the lease, the block policy and your mortgage lender’s requirements.
The government-funded Leasehold Advisory Service explains how buildings insurance normally works for leasehold property.
My guide to leasehold property explains the wider differences between freehold and leasehold ownership.
New-build homes
A new-build contract may also depart from the usual position. For example, the developer may retain the risk until legal completion while construction is continuing.
The contract needs to be checked rather than assuming that insurance must begin at exchange.
A structural warranty is also different from ordinary buildings insurance. The warranty deals principally with specified construction defects and related risks. Buildings insurance protects against events such as fire, storm and flood, subject to the particular policy.
What if the property will be empty?
This is worth raising with the insurer rather than leaving it until after exchange.
The seller may already have moved out, or you may intend to carry out work before moving in. Home insurance policies commonly impose additional conditions or restrict cover once a property has been unoccupied for a specified period.
The policy might require inspections, security precautions or particular arrangements concerning heating and water. Major renovation work can also affect ordinary home insurance.
Tell the insurer what will actually happen after exchange and completion. If the property will be empty, make that clear when arranging the policy.
Frequently asked questions
Do I arrange buildings insurance before or after exchange?
Arrange it before exchange so that the cover is ready to begin when contracts are exchanged. For an ordinary freehold purchase where the contract puts the property at your risk from exchange, that will usually be the appropriate start date.
Do I need insurance when I sign the contract?
Not simply because you have signed it. Signing normally takes place before exchange. It is exchange that makes the contract binding and usually triggers the need for the buyer’s buildings insurance to be in force.
Can I insure a house before I own it?
Yes. This is entirely normal in a property purchase. Once you have entered into a binding contract to buy the property, you have a financial interest that can be insured.
What if exchange and completion happen on the same day?
The uninsured period may be very short, but the buildings will still need appropriate cover once you become the owner. It is sensible to have the insurance arranged beforehand rather than trying to organise it while completion is taking place.
My separate guide explains the practicalities of exchanging and completing on the same day.
What if I forgot to arrange insurance before exchange?
Contact your conveyancer, insurer and, if relevant, mortgage lender promptly. Insurance cannot normally be bought retrospectively to cover damage that has already happened, so an uninsured period should not be allowed to continue.
One date worth getting right
Insurance can feel like one more administrative job in an already crowded house move. But the start date matters. If your contract puts the property at your risk from exchange, a policy beginning on completion may leave a significant uninsured gap.
For an ordinary freehold purchase, the practical rule is usually simple: Arrange buildings insurance before exchange and have the cover begin when contracts are exchanged. But check the contract, particularly for leasehold and new-build property.
It is one of those questions that is worth asking even if the answer seems obvious. When the potential loss is the value of a home, assumptions are unusually expensive.
The next stage of the transaction is covered in my guide to what happens on completion day.
Last legally reviewed: 31 August 2026
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.
