Prospective buyers who are looking at purchasing a home should consider the need to get home insurance in place early in the process. For buyers who are getting a mortgage to purchase the home, confirmation of acceptable insurance is required prior to closing. We recommend that Contracts of Purchase and Sale include a condition which permits the buyer to investigate the availability of home insurance prior to subject removal.
For those buying in areas like the Okanagan where there is a wildfire risk, this can be even more important. Insurance companies are often concerned about providing insurance over properties that are in high risk locations particularly when there is a current event such as the wildfires in the Kelowna area. Ensuring that a buyer can get the necessary insurance prior to removing conditions can be the difference between being able to complete the contract and not being able to close.
Once a buyer has arranged their insurance, they should provide the name of their insurance broker/insurance company to their lawyer. The lawyer will need to request written confirmation of the insurance particulars from the insurance company before they can release funds on the closing of the purchase. As well, the lawyer will ensure that the insurance company has the lender named as a loss payable as required by the lender. If this confirmation is not available, the buyer may be left in a precarious situation as they are obligated to complete the purchase, but cannot get the financing needed to do so.
For those buyers not getting mortgage financing, it is still strongly recommended that they investigate their insurance options and arrange to have insurance in place for the property prior to the closing date to protect their soon to be new asset.
The moral of the story is to look into insurance early and protect yourself!
Author: Una Gabie
This information is general in nature only. You should consult a lawyer before acting on any of this information. This information should not be considered as legal advice. To learn more about your real estate needs, please contact our office at (250)448-2637 or any of our lawyers practicing in the area of estate planning at the following:
Una Gabie: firstname.lastname@example.org
Jennette Vopicka: email@example.com
Danielle (Dani) Brito: firstname.lastname@example.org