Building Indemnity Insurance

[pmakwana]

Im am in the process of buying a new property and amnearly in a position to exchange contracts. However there was a enquiry raised by the solicitors. The house has an extension which was done to the rear over 20 years ago. Apparently, there is no building regulatons or the back wall. I have been told by my solicitors that I will have to take out indemnity insurance for the back wall. Can someone tell me what this insurance is? How much it would cost? and why I should have this?

Thanks

[buildersmate]

There is a similar question here which was answered by Ethel and me.
http://www.theanswerbank.co.uk/Business-and-Fi nance/Question389045.html
You shouldn't be expected to pay for it so I'm not sure what your insurer is playing at. The usual process is the seller picks up the cost - it's his error afterall.
Or get the cost knocked off the price you pay.

[buildersmate]

Solicitor, not insurer.

[pmakwana]

Thanks for the advice

[Eve]

How did the issue come up, was it raised in the valuation, probably done for the mortgage lender.

If so then your lenders may well have a say in what can and cannot be done. It should be checked if they are satisfied with indemnity insurance.

It may have come up from a local search if planning was noted but no building regulation approval or revealed in information forms filled in by the seller or replies to your solicitor's enquiries.

Solicitors only tend to be overly concerned about lack of building regs if they are under 10 years old (esp under a year as indemnity insurers won't cover it) as it's generally thought that it's past any enforcement action by the council.

Regardless of that I'd want to make sure there is not issue with the wall ie that it was done properly and is not going to cause you a problem either during your occupation or sale eg the wall hasn't been erected properly and could fall down.

Indemnity insurance, payable by way of one off premium which is usually based on the indemnity limit required - usually the purchase price but some lender's require a specific amount eg a percentage above their mortgage advance or full market value) is common but to be honest almost too common these days as it's seen as a cover all solution to any problem BUT you need to consider what the insurance can cover, the terms, conditions and, more importantly, limitations or restrictions. It's an insurance policy not a magic sticking plaster.

For example, in most cases, an approach to the local authority to check things out can invalidate any claim as, as the insurers will see it, you have put them more at risk of a claim by alerting them.

There is a growing habit of just putting in a few details online and downloading a policy without proper advice and consideration being given so please make sure everything has been checked out properly.

Hope

[pmakwana]

Thans for that advice Jenna.

I am waiting for my solicitors reply. I have requested that the seller purchases this insurance