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Property Law: It’s vital for Buyers to get insurance after signing a Contract

Buyers are often surprised when they discover they need to take out property insurance after the legal Contract is freshly signed by both parties. Why not later on when the property contract settles and they actually own the property?

A common question our conveyancing solicitors in Sunshine Coast hear is:

‘We don’t own the property yet – so why would we need to have the property fully insured. Wouldn’t insurance be the responsibility of the Seller until Settlement?’

The short answer given by our Nambour property law solicitors is “no”. The REIQ Contract is drafted so that the property becomes the risk of the buyer from 5:00pm on the first business day following the contract date (the date both parties fully sign the contract on).

Although the Seller still has an obligation until property settlement happens to take reasonable care of the property and will probably keep up the insurance until settlement, our property lawyers in Sunshine Coast do not recommend that you rely upon this, as there are instances where:

  1. the Seller may not take out real estate insurance;
  2. The Seller may be unwilling to make a claim on their property insurance policy;
  3. the Seller may cancel the insurance; or
  4. an event occurs causing damage that may not be covered by the Seller’s real estate insurance policy.

If any of the above circumstances apply, and a Buyer has not insured the property, then they do not have a right to terminate the legal contract or seek a reduction in price from the Seller if the property is damaged before property Settlement (exceptions apply if there has been fire or vandalism – where the damage is so extent that it becomes unfit for occupation).

This is why our Nambour property law solicitors always advise Buyers to immediately approach their insurer as soon as the legal contract is signed.

What type of insurance is important?

The type of insurance will vary depending on what type of real estate you are purchasing.

  1. Vacant Land

For vacant land, a buyer should take out public liability insurance. Once the house has been fully constructed on the land, a comprehensive insurance cover should then be taken out for building and contents insurance.  

  1. House

In addition to public liability, it is important to also take out building and contents insurance. Even though you haven’t yet moved in your ‘contents’. Contents covers carpet, appliances, curtains and other soft and hard fixtures and finishes within the dwelling. If the house floods and its internals are damaged, you will want to have the ‘contents’ insured.

  1. Units in a body corporate

For property purchases involving a body corporate, insurance cover should be taken out for the contents of the unit and public liability insurance for the interior of the lot. The body corporate is responsible for insuring the building and for public liability of the common property. You should also be conducting searches to check that the insurance held by the Body Corporate is sufficient and in place.

It is always important to err on the side of caution with insurance.

For further enquiries regarding property law advice and real estate insurance advice, feel free to contact the conveyancing solicitors in Sunshine Coast from Butler McDermott Lawyers Property Law team in Nambour for a confidential discussion.

This property law article is not intended to advise you in relation to your specific circumstances and should be used as a general guide only.

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Peter Boyce


Peter has been practising as a Nambour Solicitor since 1977 and joined Butler McDermott Lawyers the same year.

With over 40 years practicing as a Sunshine Coast lawyer, Peter has extensive knowledge of various facets of law.

He has practised in all areas of litigation and has special interests in:

  • Criminal law
  • Civil and Commercial litigation
  • Retirement Village matters
  • Sports law
  • Resumption of land and compensation claims


Peter has specialised knowledge of and experience with resumption matters as a result of the Traveston Dam project, road corridors, Main Roads and water pipeline. He is renowned for his professional approach and is an experienced and determined advocate.

Brent King


Brent works as a litigation lawyer, providing litigation legal advice in relation to both civil and criminal law matters, including:
  • Defamation Claims
  • Contract and Debt Disputes
  • Building and Construction Disputes
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Having grown up on the Sunshine Coast and joining Butler McDermott after the completion of his studies, Brent appreciates the needs of our clients, and brings a particularly commercial approach to litigation. Brent is a member of the Queensland Law Society and the Sunshine Coast Law Association, and has litigated a wide variety of matters in the Magistrates, District and Supreme Courts.

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After arriving at Butler McDermott Lawyers in 2016, Al quickly progressed to running our Wills and Estates section and has successfully litigated disputes in the Supreme and District Courts of Queensland in the early stages of his career.

In the years that followed Al has now moved to assist our clients with commercial and property matters having achieved positive outcomes in that area as well as general litigation. Al’s experience has him uniquely placed to provide quality advice in the areas of property, commercial, wills and estates and general litigation.

Al is involved in giving back to the community, sitting on the board for the Daniel Morcombe Foundation and Sundale Community Foundation. He otherwise became a director of Butler McDermott Lawyers in November 2021.