Mining and Mineral Rights Indemnity Insurance Bank conveyancing requirements
Santander and Virgin Money, as with most mortgage companies, set their own requirements when it comes to mining and mineral rights indemnity insurance. This page is designed to help conveyancing firms on the various mortgage company solicitors panel where the title for the the property to be mortgaged includes mining and mineral rights. It is not a alternative for checking the CML handbook requirements for each bank, for example Godiva Mortgages, Natwest or Halifax. The content on this page is not focused on mining and mineral rights indemnity insurance requirements.
Need help with mining and mineral rights indemnity insurance from your lender?
Nationwide and Yorkshire Bank Home Loans in common with most mortgage companies, obligations require that where mining and mineral rights indemnity insurance is to be put on risk:
- your practice must send a duplicate of the mining and mineral rights indemnity insurance to the borrower and explain to the mortgagor why the mining and mineral rights indemnity insurance policy was effected and that a further policy could be mandatory if there is supplemental lending against the mortgaged property
- your firm must explain to the borrower that the borrower must adhere to any conditions of the mining and mineral rights indemnity insurance policy and that the borrower should notify the bank of any notice or potential claim in relation to the insurance
- the mining and mineral rights indemnity insurance policy should not incorporate terms which you know would void or compromise the interests of the bank
- the mining and mineral rights indemnity insurance policy needs to be in favor of the mortgage company and, wherever possible, in favour of the mortgagor and any future owner or bank. If the borrower will not be protected by the mining and mineral rights indemnity insurance policy, you must advise the borrower of this fact.
- you must approve the terms of the mining and mineral rights policy on behalf of the lender
- the level of indemnity must satisfy the requirements for the bank (see UK Finance Lenders’ Handbook Part 2 )
- your practice is required to reveal to the insurer all relevant information which you have gathered
- the mining and mineral rights indemnity insurance policy should be placed on risk at no charge to the bank
| Lender | Requirement |
|---|---|
| Bank of Scotland Private | Not less than the Facility plus 10%. |
| Barclays plc | Higher of purchase price or valuation |
| Ecology Building Society | An amount equal to at least 110% of the mortgage advance |
| Family Building Society | An amount at least equal to the mortgage advance. |
| Habito | Higher of purchase price or valuation |
| Handelsbanken | Purchase price or 110% of mortgage advance, whichever is the greater. |
| Hinckley and Rugby | The policy must be for our benefit and for no less than the amount lent to the borrower, including retentions, stage payments and interest. |
| 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. |
| 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. |
| Landbay Partners | An amount equal to 100% of the property valuation or purchase price (whichever is greater) plus 10%. |
| Leeds Building Society | An amount at least equal to the amount of the mortgage advance plus 10%. Any indemnity insurance policy must protect the borrowers, any successor in title and any Mortgagee. |
| M&S Bank | the value of the insurance must be for at least the full value of the property |
| Market Harborough Building Society | Purchase price or valuation - higher of the two |
| Nedbank | You are to refer to us for specific instructions on any matter involving indemnity insurance. |
| Rely Mortgages | An amount at least equal to 110% of the mortgage valuation. |
| Saffron Building Society | Higher of purchase price or valuation. Any indemnity insurance policy must be for our benefit, that of any transferee/assignee (legal or equitable) of the mortgage and also the borrower(s). |
| State Bank of India UK | The purchase price or value of the property, whichever is the higher. |
| Swansea Building Society | Purchase price or market valuation whichever is the higher |
| Royal Bank of Scotland -Natwest One | An amount equal to the value of the property. |
| Yorkshire Building Society | An amount at least equal to the amount of the mortgage advance. Any indemnity insurance policy must protect the borrowers, any successors in title and any mortgagee. |
General Mining and Mineral Rights indemnity insurance points to consider
The extent of the terms for mining and mineral rights indemnity insurance are explained in the policy document. Property lawyers should point the borrower to the mining and mineral rights indemnity insurance policy document. Mining and Mineral Rights Contingency insurance is designed to afford indemnity in respect of the risks specified in the policy schedule - so it’s important to check the schedule to ensure it is in order. The continuance of this non-investment insurance contract is in perpetuity unless otherwise stated in the mining and mineral rights indemnity insurance policy. Adequacy in this regard should be checked.Mining and Mineral Rights Contingency insurance: Significant aspects and benefits:
The insurance will normally cover where someone claims to be entitled to the benefit of the specified risks, stated in the mining and mineral rights indemnity insurance schedule. Mining and Mineral Rights indemnity insurance Cover normally includes- All other costs and expenses incurred by the Insured with the written consent of the relevant insurance company
- Cover for compensation incurred in any proceedings concerning the risks specified in the mining and mineral rights insurance, including fees of a legal nature.
- 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.
- The cost of works (including professional fees) for the purpose of the development commenced, prior to proceedings for the enforcement of the risks specified in the mining and mineral rights insurance, to the extent that such costs are rendered abortive by court decision.
- Loss in market value resulting from the successful enforcement of the risks specified in the mining and mineral rights indemnity insurance.
- All sums paid with consent in writing from the insurance company to liberate the property from the risks specified in the mining and mineral rights insurance.
Don't forget to check what is not included in the mining and mineral rights insurance e.g. does the policy cover any residence that has been altered within the 12 months prior to the policy being put on risk? Are legal costs covered?
Mining and Mineral Rights Indemnity Insurance has limitations - Other considerations
Mining and Mineral Rights Indemnity policies can provide effective protection, but non-lender clients should be asked to give pause for thought and consider that the consequences of not being able to enjoy the property as anticipated may mean that mining and mineral rights indemnity cover will not necessarily be the answer. Content on this webpage is for general information for conveyancers and solicitors in England and Wales on the the bank solicitor panel, it does not constitute advice for members of the public who should contact their lawyer for advice relating to the mortgage company 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 mining and mineral rights Policies is if you make any contact with any party who might cause a claim under the Policy, it can invalidate the cover.
The above information is in relation to properties in England and Wales.