Home Buyers Insurance: 5 Hidden Home Defects Insurance Saves You From!
Buying a home is incredibly exciting, but let’s be honest, it is also super stressful! One big worry is the house sale falling through after you have already spent money on it.
Thankfully, home buyers insurance (also called gazumping insurance) has your back.
If your house purchase collapses through no fault of your own, this handy cover helps you get your money back.
It covers your hard-earned cash spent on legal fees, survey costs, and mortgage lender fees.
Ultimately, it gives you peace of mind so you can focus on finding your dream property without financial stress.
What Is Home Buyer Protection Insurance?
Buying your dream house is incredibly exciting, but sadly, one in three property sales falls through in the UK.
When a deal collapses, you usually lose all the money you spent on upfront fees.
Fortunately, Home Buyer Protection Insurance (also called gazumping insurance) comes to the rescue.
If your purchase fails through no fault of your own, this unique policy lets you easily claim your hard-earned cash back. It completely reimburses your upfront expenses, such as:
- Legal and conveyancing costs
- Professional survey fees
- Mortgage lender valuation charges
Consequently, you get ultimate peace of mind.
Who Should Get Home Buyer Protection Insurance?
Honestly, this protective policy is a smart choice for almost anyone navigating the tricky property market.
Moreover, buying a house involves significant financial risks, especially if you end up stuck in a long property chain.
Therefore, this coverage is for:
- First-time buyers taking their very first step
- Existing homeowners moving to a brand-new house
- Smart buy-to-let property investors
- People are purchasing a relaxing second holiday home
Ultimately, if you are spending money on a property before officially exchnaging contracts, you absolutely need this vital financial safety net.
What Is The Cost Of Home Buyer Protection Insurance?
Protecting your hard-earned money is surprisingly affordable, with budget-friendly prices starting from just £74.
Best of all, there is absolutely zero excess to pay when you make an official claim.
You can easily choose between three straightforward packages depending on your specific needs:
- Standard (£74): This covers up to £750 in legal fees and £500 in survey fees.
- Plus (£149): Boosts coverage up to £1,500 legal and £750 survey fees.
- Premier (£199): Maxes out at £2,000 in legal fees and £1,000 in survey fees.
In short, it is a tiny price for massive financial protection.
When Should You Buy Your Home Buyers Protection Policy?
Timing is absolutely everything when it comes to securing your home buyers insurance.
Ideally, the perfect moment to purchase your policy is right after the seller accepts your property offer in writing.
Usually, this happens when you receive your official memorandum of sale. However, you must act fast!
Moreover, you need to buy the coverage within 14 days of hiring your conveyancing solicitor or submitting your mortgage application, whichever comes first.
Most importantly, make sure you buy it before paying for a house survey. Taking it out early ensures all your upfront expenses are fully covered.
Home Buyers Protection Insurance Vs. Other Home Insurance Types
It is very easy to confuse different insurance policies, but they actually do completely different jobs.
- First, home buyers’ insurance protects your wallet before you even own the house by refunding your legal and survey fees if the sale crashes.
- Next, buildings insurance is what you need once you own the property to cover structural repairs from fires or storms.
- Finally, contents insurance protects your personal belongings inside the house, like your furniture and jewelry, from theft or accidents.
Each one plays a vital role in keeping you safe at different stages.
Key Benefits Of Homeowners Alliance Home Buyers Protection Insurance
We offer three fantastic packages—Standard, Plus, and Premier—so you can easily pick the perfect fit for your budget.
Our policies are designed to protect your hard-earned money with absolutely zero excess to pay. Plus, they even cover the VAT on your professional fees!
Furthermore, you must buy your policy within 14 days of telling your solicitor or lender about your purchase, and definitely before your survey happens.
Here is a simple breakdown of what you get with each plan:
| Insurance protection for: | Standard | Plus | Premier |
|---|---|---|---|
| Conveyancing fees | £750 | £1,500 | £2,000 |
| Survey & mortgage valuation | £500 | £750 | £1,000 |
| Mortgage lender fees | £250 | £250 | £350 |
| Storage & accommodation | – | £300 | £300 |
| Mortgage broker fees | – | £200 | £350 |
| Gazumping protection | Included | Included | Included |
| Excess fee to pay | £0 | £0 | £0 |
| Policy length | 120 or 180 days | 180 days | 180 days |
| Covers VAT on fees | Yes | Yes | Yes |
| Policy cost | £74 | £149 | £199 |
What Is The Risk Of A Purchase Falling Through?
You find a perfect house, make an offer, and the seller accepts it. Sounds straightforward, right?
Unfortunately, government figures show that around 1 in 3 property transactions completely fall through before completion.
When a deal crashes, eager buyers are often left footing the bill for expensive upfront fees.
Moreover, this is exactly why securing home buyers insurance is a smart move. It acts as your ultimate safety net. This is equally important.
This ensures you do not lose hundreds of pounds if your property journey faces an unexpected roadblock. Ultimately, it keeps your hard-earned money safe.
When Does Home Buyers Protection Insurance Cover Apply?
It is incredibly important to know exactly when your protective coverage kicks in. This handy policy is designed to protect your wallet during various unexpected situations. Specifically, your insurance covers you if:
- Firstly, the property owner suddenly withdraws the house from the market.
- Secondly, you get gazumped by an offer at least £1,000 higher than yours.
- Thirdly, the mortgage valuation comes back at less than 90% of your offer.
- After that, you face involuntary redundancy or a forced job relocation.
- Lastly, major property damage occurs, requiring repairs that cost more than 10% of the home’s value.
Consequently, you can look for your dream home with total confidence.
What Are The Restrictions And Exclusions To The Cover?
While this insurance offers fantastic peace of mind, there are a few common-sense rules you need to know.
First, the permanent property must be located in England, Wales, or Northern Ireland.
Second, you cannot claim any costs spent before your policy officially starts or if you have already completed a home survey.
Additionally, you will not be covered if:
- You simply change your mind and withdraw from the sale.
- You knew about a problem that would break the deal before buying insurance.
- The purchase involves a high-stress contract race or a sealed-bid process.
- You are self-employed or took voluntary redundancy.
Therefore, always check the guidelines to ensure you are fully eligible.
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