Mining and Mineral Rights Indemnity Insurance Mortgage Company conveyancing requirements
Barnsley BS and Skipton, like many banks, set their own specific instructions when it comes to mining and mineral rights indemnity insurance. This page is designed to help domestic conveyancing solicitors on the various bank conveyancing panel where the title for the the property to be mortgaged contains mining and mineral rights. Solicitors should still check the CML handbook requirements for each mortgage company, for example Barclays, Nationwide or Accord. 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?
RBS and Natwest like many banks, obligations require that where mining and mineral rights indemnity insurance is to be taken out:
- the level of indemnity must satisfy the requirements for the mortgage company (see UK Finance Lenders’ Handbook Part 2 )
- the mining and mineral rights indemnity insurance policy must be placed on risk at no cost to the mortgage company
- the mining and mineral rights indemnity insurance policy must be in favor of the bank and, wherever possible, in favour of the borrower and any future registered proprietor or mortgagee. Where the mortgagor will not be protected by the mining and mineral rights indemnity insurance policy, you must advise the mortgagor of this fact.
- your firm are responsible for approving the terms of the mining and mineral rights policy on behalf of the mortgage company
- you is duty bound to spell out to the borrower that the borrower will need to comply with any conditions of the mining and mineral rights indemnity insurance policy and that the mortgagor should notify the mortgage company of any notice or potential claim in relation to the policy
- you is obliged to reveal to the insurer all relevant information which you have acquired
- the mining and mineral rights indemnity insurance policy should not incorporate conditions that you know would invalidate or compromise the interests of the bank
- your firm must supply a duplicate of the mining and mineral rights indemnity insurance to the borrower and explain to the borrower why the mining and mineral rights indemnity insurance policy was effected and that additional insurance might be mandatory if there is supplemental lending against the security of the property
| Lender | Requirement |
|---|---|
| Adam & Company International | The open market value of the property according to the valuation report. |
| Aviva Equity Release | Full value of the property. |
| Clydesdale Bank | Open market value of property. |
| Coutts Finance | The open market value of the property according to the valuation report. |
| GE Money | GE Money Home Lending has withdrawn from the UK mortgage market. |
| Gen H | An amount equal to the value of the property unless specifically agreed in writing otherwise. |
| HSBC UK Bank | The value of the insurance must be for at least the full value of the property |
| 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. |
| Legal & General Home Finance | The policy should be for the full market value of the property and indexed linked. The policy must be for our benefit, and for the benefit of the borrower where available. The policy must benefit all successors and assigns. |
| LendInvest | An amount at least equal to the valuation of the property. |
| Lloyds TSB Scotland | The 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). |
| Metro Bank | The open market value of the property according to the valuation report. |
| Molo Finance Buy to Let | 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 mortgages. |
| Mortgage Express (No 2) | [This lender has not published an answer to this question. Please contact the lender.]
|
| Reliance Bank | \xA31,000,000.00 |
| Scottish Building Society | Amount of mortgage plus 25%. |
| RBS - Direct Line | An amount equal to the value of the property. |
| Whistletree | The value of the property |
| Yorkshire Bank | Open market value of property. |
General Mining and Mineral Rights indemnity insurance points to consider
The full terms, conditions and exclusions for mining and mineral rights indemnity insurance are set out in the policy document. Conveyancing solicitors should direct the borrower to the mining and mineral rights indemnity insurance policy paperwork. The intention of mining and mineral rights indemnity insurance is to afford indemnity in respect of the risks specified in the policy schedule - so you should check the document to determine that it is correct. The continuance of this non-investment insurance agreement is in perpetuity unless the policy says something to the contrary. Adequacy in this regard should be checked.Significant aspects and benefits of mining and mineral rights indemnity insurance :
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 Policies should be checked for the following- The cost 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.
- All other costs and expenses incurred by the Insured with the written consent of the relevant insurer
- Money paid with the written consent of the insurance company to liberate the property from the risks specified in the mining and mineral rights policy.
- Liability for damages or compensation incurred in any action concerning the risks specified in the mining and mineral rights indemnity insurance, as well as fees of a legal nature.
- Expenses for works (including architects’ and surveyors’ fees) for the purpose of the development begun, or contracted for, 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 order.
- Market value reduction resulting from the successful enforcement of the risks specified in the mining and mineral rights indemnity insurance.
Don't forget to check what is not included in the mining and mineral rights indemnity insurance e.g. does the policy cover any property that has been altered within the year prior to the commencement of the policy? Does it cover legal costs?
Supplemental considerations for mining and mineral rights indemnity insurance
Mining and Mineral Rights insurance may satisfy lenders such as HSBC or Santander and prevent clients from from suffering financially but it cannot compensate for the stress and inconvenience the emotional suffering - after all the value of a home cannot always be measured in cash in the eyes of the owner. Information provided on this webpage is for general information for conveyancers and solicitors 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 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 content set out above covers to properties in England and Wales.