Navigating The Changing Insurance Landscape: Property Buyers Beware

With insurers tightening their criteria amid rising climate and risk factors, property buyers can no longer assume insurance will fall into place automatically. Understanding these changes early can help prevent costly delays or complications at settlement.

The property market is changing, and so is the insurance landscape. Increasingly, insurers are tightening their criteria for coverage, driven by factors such as climate change, rising natural disaster risks, and stricter underwriting standards. For purchasers of property, the changing landscape means that insurance is no longer guaranteed simply because you own a property.

In addition, lenders often require insurance as a condition of settlement, meaning failure to secure cover can derail a transaction.

To protect themselves and avoid costly surprises, purchasers should:

Contact insurers early in the process and confirm insurability of the property before signing an agreement.
Factor premium costs into affordability calculations.

In some cases, it may also be appropriate to include a clause in the agreement for sale and purchase, making it conditional on obtaining satisfactory insurance (including the premium).

A failure to address insurance early can have significant effects such settlement delays or failure if lending cannot be obtained, breach of contractual obligations and significant financial loss.

If you are considering a property purchase, contact a member of our property and commercial team for guidance before you sign on the dotted line. Harkness Henry is here to help.

This article is current as at the date of publication and is only intended to provide general comments about the law. Harkness Henry accepts no responsibility for reliance by any person or organisation on the content of the article. Please contact the author of the article if you require specific advice about how the law applies to you.