Here is the rule almost no first-time buyer knows: under a standard English contract, the property is at your risk from exchange, not completion. If the house burns down in the gap, you are still contractually bound to buy it — which is why your lender requires buildings insurance to be in force from the moment of exchange, and why this step comes before it.
Buildings versus contents
Buildings insurance covers the structure and permanent fixtures — walls, roof, kitchens, bathrooms — against fire, flood, storm and the rest; it is what lenders require. Contents insurance covers your belongings and is optional (but wise). Insure the buildings from exchange on the property you are buying; your contents policy matters from the day your possessions move.
Rebuild cost, not price
The sum insured is the rebuild cost — what it would cost to clear the site and reconstruct the house — which is a different number from market value, often lower (land is most of the price in expensive areas) and occasionally higher (period features, stone construction). Your survey or the lender's valuation usually states a reinstatement figure; use it rather than guessing, because under-insuring proportionally reduces every claim.
Leasehold flats differ
In most blocks the freeholder insures the building and you pay through the service charge — so you do not buy buildings cover, but your conveyancer must verify the block policy exists, is adequate, and notes your lender's interest. Your own job is contents insurance, plus understanding any excesses that flow to leaseholders after a claim.
Your action list
Practical tips
- Insurers price the postcode's flood history — the environmental search you already paid for tells you what they will see.
- Buying buildings and contents together at completion-time prices is usually cheaper than bolting contents on later.
What can go wrong
- Starting cover at completion instead of exchange leaves you contractually bound to buy an uninsured building for weeks.
- Insuring the purchase price instead of the rebuild cost either overpays the premium or, worse, quietly caps your claims.
- PropertySquares provides education, not financial or legal advice. Verify current rules and obtain advice for your circumstances before acting.