What is home buyers insurance and do I need it?

This guide is for informational purposes only. We do not currently offer home buyers insurance at MoneySuperMarket.

Key takeaways 

• Home buyers’ insurance gives you financial protection if your home purchase falls through.

• It covers non-refundable costs like surveys and mortgage arrangement fees.

• It won’t cover issues like failing to secure a mortgage due to poor credit or delays you caused.

What is home buyers’ insurance? 

Home buyers’ insurance is a short-term policy that protects you from financial loss if a property purchase falls through, covering costs like survey fees, legal expenses, and mortgage arrangement fees.

It protects you from being out of pocket for non-refundable. It is also called home buyers protection insurance.

Home buyers' insurance is a different product to home insurance. Home insurance protects your building and your belongings from disasters such as burglary, floods and fires.

Do I need home buyer's insurance?

There is no legal requirement to have home buyer’s insurance when you buy a home.

But home buyers insurance could offer you valuable protection considering how expensive the process of buying a house is, and how often housing deals fall through.

Common reasons for failed home purchases include:

• The seller accepting a higher offer from someone else after they’ve already accepted yours - known as gazumping 

• The seller changes their mind and pulls out of the sale - or another sale in your property chain collapses 

• The mortgage lender’s valuation is lower than the offer you made 

• Your survey reveals that extensive works are needed 

• There are delays in conveyancing  

• Your mortgage offer expires 

What does home buyers’ insurance cover? 

Your home buyers’ insurance policy will cover you for a number of different losses you might face if your property purchase fails, such as:  

• Conveyancing fees 

• Survey fees 

• Valuation fees 

• Mortgage arrangement fees 

• Lenders fees 

• Electronic transfer fees 

These additional expenses already significantly increase the financial burden of purchasing a property. If your deal falls through, you may end up having to pay the fees again on the next property you try to buy. That can put a lot of extra strain on your budget, or even make putting in another offer unaffordable.

What isn’t covered by home buyers’ insurance? 

Home buyers' insurance does not cover situations such as:

• failing to secure a mortgage due to insufficient credit history

• the seller withdrawing due to delays you caused

• deciding against buying after the property doesn't meet expectations

What insurance will I need once I’ve bought my home? 

Once you’ve bought your home and the contracts are exchanged, there are a number of other types of insurance you might want to consider to ensure you’re financially protected. 

Compare quotes for cheaper insurance

Finding affordable insurance is easier when you compare quotes with MoneySuperMarket. Just tell us about yourself and the type of cover you want to take out, and we’ll show you a list of deals from providers across the market.

You’ll be able to compare deals by the overall cost, the excess you’ll pay and the cover you’ll get. Once you’ve decided, just click through to finalise your purchase.