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Article | 2 minute read

Who’s responsible for insurance during the settlement period?

If you’re buying a property, at some point the seller will no longer be accountable for the damage to the property and it becomes your responsibility.

But when is that? At exchange of contracts? At settlement? It’s important to find out so you know when you should have insurance in place. After all, a mistake could be very expensive. Should your home be hit in a storm during the settlement period you don’t want to discover too late that the damage is actually your responsibility to pay for! 

The standard contract for sale in each state and territory offers a good starting position to understand when the risk of damage to the property might pass to the buyer.

However, it is important to note that your particular contract for sale may contain a special condition that varies the standard contract. So you should always engage a solicitor or conveyancer to check your contract so you can be certain when the risk of damage to the property passes to you.

What are the rules in my state?

The standard position when the risk of damage to a property passes from seller to buyer varies from state to state. 

Generally, risk passes to the buyer either on exchange of contracts (such as in South Australia and Tasmania) or at settlement (such as in New South Wales and Victoria).

Here’s a summary of the standard position in each state and territory which may be varied by your particular contract. 


What about strata schemes?

In strata schemes, the buyer of a lot isn’t usually responsible for purchasing building insurance because the building itself is considered common property. The owners’ corporation will handle it. But you should check with your lawyer or conveyancer whether you need to consider purchasing insurance, just in case. For example, the building insurance policy held by the owners’ corporation may not cover internal fixtures such as floorboards. 

You may also want to consider a contents insurance to cover your possessions. 

Better safe than sorry?

Some buyers get home insurance as soon as the contract is signed in case the seller does not have adequate insurance in place. 

Some lenders will insist that the buyer does this. If in doubt, ask your lender.  

If this applies to you, you should check that your insurance policy commences from the date that contracts are exchanged.

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Information on this page is general only and is not a substitute for professional advice in relation to the costs of selling your home.

ANZ Home Insurance is issued by QBE Insurance (Australia) Limited (ABN 78 003 191 035).

This information is of a general nature and has been prepared without taking account of your objectives, financial situation or needs. You should consider whether the information is appropriate for you having regard to your objectives, financial situation or needs.

ANZ recommends that you read the ANZ Home Insurance Product Disclosure Statement and Policy, available by calling 13 16 14 or visiting, before deciding whether to acquire, or to continue to hold, the product. ANZ Group receives a commission of up to 26% of your premium for ANZ Home Insurance. In addition to their salary, ANZ staff members may receive monetary and non-monetary benefits depending on the product they are selling or providing advice on. You may request further information from ANZ.

Property price information in an ANZ Property Profile Report is an estimate (not a valuation), may not be available for all properties, is for personal domestic use only and may change daily. Actual sale prices may differ. Accuracy assessed on final pre-sale predictions, national market comparison of free price predictors for listed properties and sales data as at April 2021. Applications for credit subject to ANZ’s credit approval criteria. The report is not personal advice and ANZ takes no responsibility for any error or omission.


ANZ may provide pre-approval (also known as approval in principle or conditional approval) to eligible customers who apply for an ANZ home loan and complete an application form and satisfy any other applicable requirements. Pre-approval is an approval for a loan subject to conditions being met, including that security is satisfactory to ANZ. Australian Credit Licence Number 234527.


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