A quirk of the Australian property scene is the fact there is more than one “scene”.
In fact, there are eight – each run by our federated state or territory governments.
This makes life pretty hard for investors, who have to navigate the rules and regulations of each jurisdiction, or a homeowner who is looking to move interstate.
So if you asked a real estate expert whether you needed insurance for the property you’re about to buy – not an unreasonable question – you’ll get that awful answer, “it depends”.
That’s because the rules of home insurance policy differ depending on the state or territory in which you intend to buy.
Here’s the state-by-state answer to the insurance conundrum:
Queensland: Once the contracts are signed and exchanged, the buyer is responsible for the property from 5pm on the next business day.
Victoria and NSW: The buyer should have cover from the settlement date (which actually means before the contracts are exchanged).
Tasmania, ACT and South Australia: The buyer is responsible for any damage during the settlement period, which can be four to six weeks on average.
Western Australia and Northern Territory: Insurance should cover you from the date you take possession (such as inheriting the property), or once you’ve paid the full price.
Some experts suggest you take out insurance cover once you’ve paid a deposit, if only to protect the asset for which you’ve now started to pay for.
If that seems a little over the top, that you should check the following:
- The owner has current insurance for the property, including for flood.
- The date that their policy lapses – you don’t want it to end midway through the settlement period and be caught out.
- In the case of an investment, find out if the property’s cover includes theft or malicious damage by the tenant.
* We recommend you always seek legal specific advice from your conveyancer or solicitor.