Auction Property Insurance
The detail most first-time auction buyers miss: the property is at your risk from the moment the hammer falls, not from completion. Here is what to insure, and when.
Risk passes at the hammer
Standard auction conditions put the property at the buyer's risk from exchange of contracts. At auction, exchange is the fall of the hammer. If the property floods, burns or gets vandalised during the 28 days before completion, you still have to complete and you carry the loss, unless you are insured. Sellers sometimes keep their own cover running, but you cannot rely on it and you cannot claim on it.
The fix is simple: have buildings insurance arranged to start on auction day, for the full rebuild cost rather than the purchase price. Quote it in advance, confirm it the moment you win.
Most auction lots need unoccupied cover
A standard home policy assumes someone lives there and typically stops covering a property left empty beyond 30 to 60 days. Most auction stock is vacant, and often stays vacant through a refurb. That means an unoccupied property policy, which usually comes with its own conditions: regular inspections, water turned off or drained down, and exclusions for damage during structural works unless declared. Tenanted lots need a landlord policy from day one instead.
Price this into your numbers alongside the premium and stamp duty in the cost calculator, and make sure your solicitor confirms exactly when risk passes under the special conditions for your lot.
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Auction insurance FAQs
When does the property become my risk?
Under standard auction conditions, risk passes to the buyer at exchange of contracts, which happens the moment the hammer falls, not at completion 28 days later. If the building burns down the night after the auction, you are still contractually bound to complete the purchase. That is why cover needs to start on auction day itself.
What kind of policy do I need?
Buildings insurance for the full rebuild cost (not the purchase price), effective from the day of the auction. Because most auction lots are empty, you will usually need an unoccupied property policy rather than a standard home policy, which typically stops covering a property left empty for more than 30 to 60 days.
Can I arrange cover before I know if I've won?
Yes. The practical approach is to get a quote agreed in advance with cover starting on the auction date, then confirm it by phone or online immediately after winning. Some insurers and brokers offer exactly this for auction buyers. What you should not do is leave it until the following week.
What if the property is tenanted or being refurbished?
Tell the insurer. A sitting tenant usually means a landlord policy, and planned refurbishment works often need to be declared or covered separately, as unoccupied policies commonly exclude damage during structural works. Getting the description wrong risks a declined claim exactly when it matters.