Insurance When Buying A Project House

The world is full of risks. Some are quite obvious but others are hidden and are only discovered upon a thorough investigation. While some risks cannot be prevented from happening, you can shield yourself through insurance. It is common practice to take out motor vehicle, travel, valuable items insurance and life assurance. However, very few people think about insuring the things they buy through an auction. However, there is great value in insuring property especially houses- commercial or residential- bought through auctions whether you intend to renovate them for your own use or you may want to sell them at a later date. But why should you do this?

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Level of risk

When buying property through an auction, you usually have very limited time to carry out a detailed assessment and search to ascertain ownership, legality of the structure and any other details of interest. In most cases, people take the auctioneers word to be the gospel truth and never bother to carry out the basic tests. This means that there is a hidden risk that may manifest later on. For example, if it is a building, it may have accumulated land rates that may lead to financial stress later on. There may also be problems with the structure which means that the structure can be demolished and you may not get a refund for your money. However, if you had worked with an insurance broker and insured the property, you may be able to recover some, if not all, the money that you had invested.

Unscrupulous dealers

There are people who are out to con others of their money. In this case, some of these people may pose in different ways including auctioneers. You may therefore end up spending your money on non-existent property or property that is already owned by someone else. In such a case, an insurance cover will shield your investment against such con people. Remember that even the most seemingly trustworthy auctioneer can mislead you and therefore do not trust strangers easily.

Way forward

Whenever you are interested in property that is being auctioned, it is appropriate to visit the property and inspect it personally. You should also request for a detailed report on the property and scrutinize the contracts to ensure that liability falls to the correct party in case something goes wrong. You should also appoint surveyors and structural experts to inspect the building in question especially if the starting bid seems to be too low compared to market prices. Remember to take out an insurance cover for the property as soon as you can.