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Insurance & buying a property: what you need to know – Part 2

In part two of our series on property insurance, we outline the different types of insurance a buyer needs to obtain when purchasing a property.  Click here to read part one of our series.

Purchasing a house

If you are purchasing a house, you will need:

  • Building insurance (this covers the building itself).
  • Contents insurance (this covers the contents contained inside the building).
  • Public liability insurance (this covers personal injury which occurs to anyone on your property).

Purchasing a lot in a community title scheme

If you are purchasing a unit in a community titles scheme (e.g. an apartment) you will need:

  • Contents insurance for the interior of your unit (includes floor coverings, curtains etc).
  • Public liability insurance for the interior of your unit.

The body corporate is responsible for:

  • Building insurance.
  • Contents insurance for the common property areas.
  • Public liability insurance for the common property areas.

If you are purchasing a stand-alone building in a community titles scheme (e.g. a townhouse that does not share a common wall, a house in a gated estate):

  • You are responsible for insuring your building.
  • The body corporate can set up a voluntary insurance scheme to insure the buildings but it is not compulsory for a property owner to take part in the scheme.

Purchasing vacant land

If you are purchasing vacant land to build on, you should obtain:

  • Public liability cover pending construction of the house.
  • Building and contents insurance once construction is finished.

Purchasing rental property

If you are purchasing property to lease to tenants, you should consider landlord’s insurance.  This type of insurance covers losses associated with rental properties, such as loss of rental income.

Obtaining a mortgage

If you are obtaining finance to purchase property, your lender’s name will need to be noted on the insurance policy as the mortgagee.

For more information, please contact a member of our property team at Fox and Thomas.