With the housing market running red-hot at the moment and many properties under multiple offers, buyers are under significant pressure to put their best offer forward. They are encouraged to make sure offers have the least amount of conditions possible which may result in less due diligence being completed. Comprehensive house insurance is usually a requirement of any mortgage on the property.
A major issue for Marlborough properties arises from being situated in a higher risk earthquake zone. This means many insurers are reluctant to offer cover in Marlborough even for existing clients. Those that are prepared to offer cover are likely to require additional underwriting information, have higher premiums and may impose conditions on the available cover.
Many earthquake-related claims were cash settled by EQC and the insurers with the responsibility for repair falling to the property owners. We are aware of many situations where claims were paid and repairs were not completed which can cause significant issues when the property comes to be sold.
Properties that have previously suffered earthquake damage will require additional information to be provided for the insurers to assess cover. This will probably include a requirement to provide the EQC Scope of Works detailing the original damage and repairs needed and confirmation that the repairs have been completed to an acceptable standard. If this confirmation is unable to be provided, cover may not be available at all or on terms acceptable to the bank providing any finance.
These requirements may also add significant time to the process of getting approval for insurance which needs to be taken into consideration.
We recommend buyers obtain approval for house insurance cover before making an offer on a property to avoid the situation where an offer has been accepted but they are unable to insure the property. Please contact us if you have any questions regarding house insurance cover.