Settlement and early ownership
Insurance before and at settlement
Why building insurance should start from contract signing, what it does and doesn't cover, and how to avoid underinsurance.
Key points
- Confirm your insurance start date immediately after signing — in Victoria, lenders commonly recommend cover from the seller's signing date, but risk-transfer timing varies by jurisdiction and contract.
- Building insurance covers the structure and fixtures, not household items — that's contents insurance.
- An owners-corporation building may already be insured by the body corporate — confirm, don't assume.
- Cover the full rebuild cost, including landscaping and removal, and review every 12 months.
When should home insurance start when you buy?
In Victoria, arrange building insurance to start from the day the seller signs the contract of sale, not from settlement day: you have an insurable interest from signing, and the seller's own cover typically runs only until settlement (Consumer Affairs Victoria, verified 29 Jul 2026). Building insurance covers the house and its fixtures; your belongings need separate contents insurance (Moneysmart (ASIC), verified 31 Jul 2026). Buying into an owners corporation? The building may already be insured by the body corporate, so confirm before you buy a second policy (Moneysmart (ASIC), verified 31 Jul 2026).
Confirm your start date immediately after signing
Get advice on when your building insurance should actually start as soon as you sign — don't leave it until settlement week. In Victoria, buyers are commonly advised to arrange cover from the date the seller signs the contract of sale, since the seller's own insurance typically remains in place only until settlement (Consumer Affairs Victoria, verified 29 Jul 2026). This is a Victorian lender recommendation and practical risk-management step, not a uniform national rule — the legal and contractual allocation of risk between buyer and seller differs by jurisdiction and by the specific contract, so outside Victoria check when your contract says risk passes to you. Whatever the jurisdiction, leaving the period between signing and settlement uninsured is a real, avoidable risk, not a formality.
What building insurance actually covers
Home building insurance covers the cost of repairing or replacing the house itself, its fixtures, and other structures like a garage or in-ground pool — it does not cover household items or personal belongings, which need separate contents insurance (Moneysmart (ASIC), verified 31 Jul 2026).
Owners corporation properties
If you're buying into an owners corporation (strata title), you may not need your own building insurance if the body corporate insures the building — confirm this directly rather than assuming, and remember you'll still generally need contents insurance for your own belongings either way (Moneysmart (ASIC), verified 31 Jul 2026).
Avoiding underinsurance
Cover should reflect the full cost of rebuilding the home — including landscaping, rubbish removal and solar panels, not just the structure itself — and should be reviewed at least every 12 months, since rebuilding costs change over time (Moneysmart (ASIC), verified 31 Jul 2026). If premiums rise, don't respond by quietly under-covering the sum insured.
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Comparing policies
Weigh the premium, the excess, exclusions and cover limits, legal liability cover, and any extended cover above the sum insured — insurers must provide a Key Fact Sheet in a government-set format specifically to make this comparison easier (Moneysmart (ASIC), verified 31 Jul 2026).
Common mistake: comparing policies on premium alone. The cheapest policy can carry a lower sum insured, a higher excess, or exclusions that matter for the specific property — check the Key Fact Sheet, not just the price.
Practical checklist
Insurance before settlement
- Arrange building insurance effective from contract signing
- Confirm whether an owners corporation already insures the building, if relevant
- Check the Key Fact Sheet, not just the premium, when comparing policies
- Confirm the sum insured reflects the full rebuild cost, not just the purchase price
Questions for a professional
- Does this policy's sum insured genuinely reflect the full cost to rebuild this property?
- If this is an owners-corporation property, does the body corporate's policy cover the building already?
Official resources
Important limitations: This is general education about how home insurance works, not personalised insurance advice and not a recommendation of any insurer or policy. Compare actual Product Disclosure Statements and Key Fact Sheets before choosing cover. When contractual risk passes to the buyer (and so when cover should start) depends on state contract law — the Victorian position is cited here, other states not yet checked.
Sources and methodology
- Before property settlement — Consumer Affairs Victoria (retrieved 29 Jul 2026, last checked 7 Aug 2026). Licence: CC BY 4.0
- Choosing home insurance — Moneysmart (ASIC) (retrieved 31 Jul 2026). Reuse terms: see the publisher's site
Figures on this page are drawn from Delora's local knowledge graph, refreshed from these primary sources and checked for changes on a regular schedule. If a figure here looks out of date, the official source above is always the authority — please let us know.
Evidence record
Keep reading
- Land transfer duty and registering the transfer Previous in Settle and take ownership
- How to transfer settlement funds safely Next in Settle and take ownership
- Settlement day and key handover Also in Settle and take ownership
- Your first week as a homeowner Also in Settle and take ownership
- Building problems found after settlement Also in Settle and take ownership