Lost Documents Indemnity Insurance Mortgage Company conveyancing requirements
Chelsea BS and Godiva Mortgages, in common with the majority of mortgage companies, dictate their own requirements when it comes to lost documents indemnity insurance. The purpose of this page to assist property law lawyers on the various lender solicitors panel where the title for the the property to be mortgaged includes lost documents. Solicitors should still check the Council of Mortgage Lenders’ handbook requirements for each lender, be it Yorkshire Bank Home Loans, Virgin Money or Coventry BS. The content on this page is not focused on lost documents indemnity insurance requirements.
Need help with lost documents indemnity insurance from your lender?
HSBC and Barnsley BS as with the majority of lenders, obligations require that where lost documents indemnity insurance is to be taken out:
- your practice is duty bound to point out to the borrower that the borrower must adhere to any conditions of the lost documents indemnity insurance policy and that the mortgagor should notify the lender of any notice or potential claim in relation to the insurance
- the lost documents indemnity insurance policy should always be for the benefit of the lender and, wherever possible, in favour of the mortgagor and any subsequent registered proprietor or mortgagee. Where the borrower will not be covered by the lost documents indemnity insurance policy, the mortgagor should be advised accordingly.
- you must disclose to the insurer all relevant information which you have gathered
- your firm must approve the terms of the lost documents policy on behalf of the lender
- the limit of indemnity must meet the requirements for the lender (see UK Finance Lenders’ Handbook Part 2 )
- your firm must supply a duplicate of the lost documents indemnity insurance to the borrower and explain to the borrower why the lost documents indemnity insurance policy was effected and that a further policy may be mandatory if there is additional lending against the security of the property
- the lost documents indemnity insurance policy must not contain conditions that you recognise would invalidate or compromise the interests of the lender
- the lost documents indemnity insurance policy must be placed on risk without expense to the bank
| Lender | Requirement |
|---|---|
| Allied Irish Bank | At least the amount of the mortgage advance. |
| Capital Home Loans | An amount which is at least equal to the value or the purchase price of the property, whichever is the higher |
| Coventry Building Society | Minimum of the value of the property. |
| Cynergy Bank | The market value of the property. |
| Halifax | An amount at least equal to the mortgage advance. |
| Halifax Loans | An amount at least equal to the mortgage advance. |
| Hodge Equity Release | An amount equal to the purchase price or value, whichever is higher. Any indemnity insurance policy must be for our benefit, that of any transferee/assignee (legal or equitable) of the mortgage, the borrower(s) and any successor in Title. |
| Kensington Mortgage | Must be for a minimum of 110% of the purchase price or valuation whichever is the greatest. |
| M&S Bank | the value of the insurance must be for at least the full value of the property |
| MPowered Mortgages | Either the minimum reinstatement value or where there is no valuation the market value/purchase price figure (whichever is higher). |
| Market Harborough Building Society | Purchase price or valuation - higher of the two |
| NRAM Ltd | Preference for full market value of the property, but if this level of cover is not available, will accept a minimum of the actual loan amount. You must approve the policy on our behalf. |
| National Counties Building Society | An amount at least equal to the mortgage advance. |
| National Westminster Bank | An amount equal to the value of the property. |
| Paragon Residential | An amount at least equal to the stated value of the Property. |
| Paratus | An amount equal to 110% of the valuation or purchase price - whichever is the greater. |
| Scottish Building Society | Amount of mortgage plus 25%. |
| St James Place | An amount at least equal to the total of the initial mortgage advance plus any pre-agreed reserve. These amounts will be shown in the mortgage offer. |
| The Mortgage Works | The full purchase price/value of the property whichever is higher |
| Whistletree | The value of the property |
General Lost Documents indemnity insurance points to consider
The full terms, conditions and exclusions for lost documents indemnity insurance are set out in the policy document. Property lawyers are obliged to point the borrower to the lost documents indemnity insurance policy itself. The intention of lost documents indemnity insurance is to grant indemnity in respect of the risks set out in the policy schedule - so it is essential check any draft to determine that it is correct. The lifetime of this non-investment insurance contract is in perpetuity unless the policy says something to the contrary. Adequacy in this regard should be checked.Important features and benefits of lost documents Contingency insurance :
This policy would usually provide protection from financial loss that might arise in the event of a third party making a cliam in respect of the risks identified in the policy document. Lost Documents indemnity insurance Policies are likely to cover the following- The cost of altering or demolishing all, or part of the development and the reinstatement of the land, insofar as such alteration, demolition or re-instatement is made necessary by court order.
- Expenses for works (including professional fees) for the purpose of the development begun, or contracted for, before the commencement of proceedings for the enforcement of the risks specified in the lost documents indemnity insurance, to the extent that such costs are rendered abortive by court decision.
- Liability for damages or compensation incurred in any action regarding the risks specified in the lost documents policy, as well as fees of a legal nature.
- Diminution in value resulting from the successful enforcement of the risks specified in the lost documents policy.
- All ancillary costs and expenses incurred by the Insured with the written consent of the relevant insurance company
- Money paid with the written consent of the insurance company to free the land from the risks specified in the lost documents policy.
You also need to be sure that the answers on the application form are correct. Regardless of how remote a claim on the lender insurance policy might be you can rest assured that the insurer will check the details on any proposal form thoroughly before any claim is met.
Other considerations for lost documents indemnity insurance
There may be consequences arising from the enforcement of the risks identified in the lost documents insurance which are not adequately covered by financial compensation. Information provided on this webpage is for general information for Regulated law firms in England and Wales on the the lender conveyancing panel, it does not constitute advice for members of the public who should contact their lawyer for advice relating to the lender indemnity insurance. Whilst we endeavour to keep the information up to date and correct we do not make any representation or warranties of any kind about its completeness, accuracy, reliability or suitability. Any reliance you place on the information is strictly at your own risk. Lexsure will not be liable for any direct or indirect loss or damage arising out of or in connection with the use of this information.
An important exclusion applying to most lost documents Policies is if you make any contact with any party who might cause a claim under the Policy, it can invalidate the cover.
The content set out above covers to properties in England and Wales.