Home Insurance and Conveyancing

Insurance isn't just a formality

Insurance for property in Queensland isn't just a formality following settlement. It is a shield to protect a property from the date the contract is entered into.

What type of insurance is required?

The type of insurance one should take out is wholly dependent on the type of property being acquired, its location and use. For instance, the type of insurance cover one should take out for vacant land will differ greatly to the type of insurance cover one should take out for a house. Similarly, a property located in a flood prone area will have a different insurance requirement to a property located in a bushfire prone area.

As a guide:

for contracts for houses, the type of insurance taken out should be for the building, contents and public liability.
for contracts for units / in a community title scheme, the type of insurance taken out will depend on the whether there are shared walls or not. Regardless of whether there are shared walls contents and public liability should be taken out (as a minimum).
for contracts for vacant land, the type of insurance taken out should be public liability (as a minimum).

Speaking with an insurance broker before signing any contract is recommended to ensure the appropriate insurance is held and maintained.

Impact on insurance premiums

In most instances the location of a property has the biggest impact on premiums. For instance, coastal areas in North Queensland generally face a higher risk of cyclone and therefore carry a higher premium to insure.

Building materials also impact premiums. For example, a brick home can be less to insurance than a timber home due to material replacement cost / labour. Speaking with an insurance broker before signing any contract is recommended to ensure no nasty surprises regarding the costs to insure.

What is 'Risk'

As a majority of signed contracts do not alter the default provisioning for 'risk' it is critical to any buyer's interest in a residential conveyance to take out insurance immediately following execution of a contract.

Due to this default provisioning on 'risk' in Queensland contracts, and if not altered, if a property is damaged (but not so damaged that it can be deemed unfit for occupation or so damaged that the property is fundamentally different) a buyer can be required by a seller to settle in accordance with the contract irrespective of damage and cause and without reduction to the price.