Indemnity Insurance of Lost Documents Lender conveyancing requirements
Barnsley BS and Leeds Building Society, as with the majority of lenders, have their own requirements when it comes to lost documents indemnity insurance. The purpose of this page to assist conveyancing lawyers on the various lender approved list of panel lawyers where the title to be charged contains lost documents. Solicitors should still check the Council of Mortgage Lenders’ handbook requirements for each lender, for example HSBC, Halifax or Bank of Scotland. The content on this page Is not to be read as lost documents indemnity insurance advice.
Need help with lost documents indemnity insurance from your lender?
Lloyds TSB and RBS like most lenders, obligations require that where lost documents indemnity insurance is effected:
- you is obliged to disclose to the insurer all relevant information which you have obtained
- you must supply a copy of the lost documents indemnity insurance to the borrower and explain to the mortgagor why the lost documents indemnity insurance policy was effected and that a further policy could be required if there is supplemental borrowing against the mortgaged property
- the lost documents indemnity insurance policy must not incorporate conditions that you recognise would invalidate or compromise the interests of the lender
- the lost documents indemnity insurance policy needs to be in favor of the mortgage company and, wherever possible, in favour of the borrower and any subsequent registered proprietor or mortgage company. Where the mortgagor will not be protected by the lost documents indemnity insurance policy, you must advise the borrower of this fact.
- the lost documents indemnity insurance policy must be placed on risk at no charge to the bank
- the level of indemnity must satisfy the requirements for the lender (see UK Finance Lenders’ Handbook Part 2 )
- your firm must approve the terms of the lost documents policy on behalf of the lender
- your firm must explain to the mortgagor that the borrower is obliged to 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
| Lender | Requirement |
|---|---|
| Allied Irish Bank | At least the amount of the mortgage advance. |
| Bank of Ireland | The limit of indemnity must be an amount not less than the market value of the property. |
| Danske Bank | The limit of indemnity insurance should be the purchase price or valuation - whichever is higher |
| Foundation Home loans | An amount equal to 110% of the valuation or purchase price - whichever is the greater. |
| Halifax Loans | An amount at least equal to the mortgage advance. |
| Intelligent Finance | 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. |
| Investec | The open market value of the property according to the valuation report. |
| Keystone Property Finance | An amount equal to 110% of the valuation or purchase price - whichever is the greater |
| Landmark | 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. |
| Monmouthshire Building Society | The higher of the purchase price or valuation. For remortgages, the value of the advance. |
| 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. |
| Perenna | The higher of the purchase price or valuation. |
| Reliance Bank | \xA31,000,000.00 |
| 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. |
| State Bank of India UK | The purchase price or value of the property, whichever is the higher. |
| Tandem Bank | An amount at least equal to 110% of the purchase price or valuation – whichever is the greater. |
| The Mortgage Business | An amount at least equal to the mortgage advance/credit limit - whichever is the highest. |
| Together Personal Finance | Minimum of £2,000,000.00 per claim. |
| Vida Homeloans | It must be for a minimum of 110% of the purchase price or valuation, whichever is greater |
Lost Documents Contingency Insurance : Reflections
The full terms, conditions and exclusions for lost documents indemnity insurance are shown in the policy paperwork. Conveyancing Practitioners are obliged to direct your non-lender client to the lost documents indemnity insurance policy paperwork. Lost Documents Contingency insurance is devised to provide indemnity in respect of the risks specified in the policy schedule - so it’s important to check any draft to determine that it is correct. The duration of this non-investment insurance contract is in perpetuity unless otherwise stated in the lost documents indemnity insurance policy. It is well worth checking that the time frame is correct.Important aspects and benefits of lost documents Contingency insurance :
The insurance will normally cover where someone claims to be entitled to the benefit of the specified risks, stated in the lost documents indemnity insurance schedule. Lost Documents indemnity insurance Policies should be checked for the following- Liability for damages or compensation incurred in any proceedings concerning the risks specified in the lost documents insurance, as well as incurred costs and expenses.
- All sums paid with consent in writing from the insurance company to free the property from the risks specified in the lost documents insurance.
- 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 policy, to the extent that such costs are rendered abortive by court order.
- All ancillary costs and expenses incurred by the Insured with consent in writing from the relevant insurance company
- Loss in market value due to the successful enforcement of the risks specified in the lost documents indemnity insurance.
- The out of pocket expenses of altering or taking down 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.
You also need to be sure that the answers on the application form are accurate. Regardless of how remote a claim on the bank insurance policy might be you can certain that the insurer will check the details on any proposal form thoroughly before any claim is met.
Lost Documents Indemnity Insurance has limitations - Supplemental considerations
Lost Documents Indemnity insurance isn’t a solution to all of the relevant problems. Content on this webpage is for general information for Regulated law firms in England and Wales on the the lender solicitor 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 is in relation to properties in England and Wales.