If you are currently trying to buy or sell a property, then you may have already heard of indemnity insurance. Overall, indemnity insurance is becoming part of more housing transactions up and down the UK. This article intends to delve into the topic of indemnity insurance and help you understand whether you need to purchase it.
What is indemnity Insurance?
Indemnity insurance is a protection policy that is used during the transaction of housing. The insurance is a one-off payment and the policy then covers any cost implications that a third party may claim against the property you are buying.
In a nutshell, an indemnity policy protects you from a very specific problem that could arise in the future and therefore cost you.
An example of when indemnity insurance would help is if the seller of a property can’t produce a building regulation certificate, then your surveyor or solicitor may suggest that you (as a buyer) will need to take out this policy to cover any costs. If you weren’t to buy the policy and the local authorities pursued any claims, then it may cost yourself a hundreds of pounds later down the line.
However, please note that the policy will not cover costs of repairing or replacing problems. Due to this, it is always important, before anything, to have a property surveyed and checked. The insurance is usually associated with older properties that may actually have historic deeds. Remember, it is key to check this during the transaction of a sale.
How much do the policies cost?
As with most things, the cost can vary depending on the type of protection you decide upon and what it is you need to be protected against. Even though it is a one-off cost, issues with certificates for parts such as new windows can cost as little as £20. Although, policies covering the loss of building certificates can cost hundreds.
The other unfortunate issue with the policies is that there is no room for negotiation. The policy is only offered out via specialist providers and your solicitor will be gather the cost for you.
Can policies be passed onto another property once a house is sold?
Unfortunately, an indemnity insurance is tied to the property and homeowner. So, if a policy is bought, then this will be passed onto the next owner of the property.
Is this type of insurance always needed?
Simply, no. Your solicitor may ask you to buy the policy however you need to think twice before agreeing to it. In the middle of a housing transaction, a few hundred pounds can feel like nothing in comparisons to the other thousands you are paying for other various outgoings. However, it could be money you have handed over for no reason.
Who should pay for the policy?
This can be arguably the difficult part of the policy. Most buyers believe that the vendor needs to cover the cost due to them not producing the certificates. On the other hand, sellers feel that the policy should be covered by the buyer as they will be the one to benefit from the policy purchase.
How does The Property Buying Company deal with Building Indemnity Insurance?
When we help customers to sell their properties, we not only do this at a timescale that suit them, but we cover all legal fees. This means we cover any solicitors’ fees, surveyors’ fees and policies such as indemnity insurance. Want to receive an initial quote? Click here to find out more.