I stand to corrected, but the purpose of the Insurance remains the responsibility of the vendors, but becomes a buyers problem after contracts are exchanged. To save time and money, send the Bank back their money and have your own money returned to you. As a point of note, if you still intend to purchase the property, surely you should be watching the extent of the repairs and in cases like this, short cuts could me made to save on the repairs and a good Xmas could be had thanks to the Insurance Company and a pissed off purchaser who can do nothing about it.