Indemnity Insurance of Road Charges Bank conveyancing requirements
Barclays and Virgin Money, in common with most banks, have their own requirements when it comes to road charges indemnity insurance. The content herein aims to help residential conveyancing lawyers on the various mortgage company conveyancing panel where the title for the the property to be mortgaged incorporates road charges. Lawyers are advised to familiarise themselves with the CML handbook requirements for each bank, whether it be RBS, Nationwide or Natwest. The information on this page Is not to be read as road charges indemnity insurance advice.
Need help with road charges indemnity insurance from your lender?
Birmingham Midshires and Skipton like most banks, obligations require that where road charges indemnity insurance is to be put on risk:
- your firm must provide a copy of the road charges indemnity insurance to the mortgagor and explain to the borrower why the road charges indemnity insurance policy was effected and that additional insurance may be required if there is further borrowing against the security of the property
- the minimum level of cover for the policy must meet the requirements for the lender (See Part II Handbook requirements )
- you are responsible for approving the terms of the road charges policy on behalf of the lender
- the road charges indemnity insurance policy must be placed on risk at no cost to the bank
- the road charges indemnity insurance policy must be for the benefit of the bank and, wherever possible, for the benefit of the mortgagor and any subsequent owner or mortgagee. Where the mortgagor will not be covered by the road charges indemnity insurance policy, you must advise the borrower of this fact.
- your practice is required to disclose to the insurer all relevant information which you have obtained
- the road charges indemnity insurance policy should not contain conditions that you are aware would void or compromise the interests of the bank
- you must point out to the borrower that the borrower will need to comply with any conditions of the road charges indemnity insurance policy and that the borrower should notify the lender of any notice or potential claim in relation to the insurance
| Lender | Requirement |
|---|---|
| Barclays plc | |
| Capital Home Loans | |
| Coutts Finance | |
| Family Building Society | |
| First Direct | |
| Fleet Mortgages | |
| Hinckley and Rugby | |
| Investec | |
| Kensington Mortgage | |
| Kent Reliance | |
| Masthaven Bank | |
| Molo Finance Buy to Let | |
| Monmouthshire Building Society | |
| Skipton Building Society | |
| Tandem Bank | |
| Royal Bank of Scotland | |
| Tipton Coseley Building Society | |
| Vida Homeloans | |
| Virgin | |
| Zephyr Mortgages |
Road Charges Contingency Insurance : Reflections
The full terms, conditions and exclusions for road charges indemnity insurance are set out in the policy paperwork. Conveyancing Practitioners should direct your non-lender client to the road charges indemnity insurance policy document. The intention of road charges indemnity insurance is to grant indemnity in respect of the risks set out in the policy schedule - so it is essential check the schedule to ensure it is as it should be. The lifetime of this non-investment insurance agreement is in perpetuity unless the policy says something to the contrary. Adequacy in this regard should be checked.Road Charges Contingency insurance: Significant characteristics and benefits:
The insurance will normally cover where someone claims to be entitled to the benefit of the specified risks, stated in the road charges indemnity insurance schedule. Road Charges indemnity insurance Cover normally includes- All sums paid with the written consent of the insurance company to liberate the land from the risks specified in the road charges insurance.
- Reimbursement for compensation incurred in any proceedings concerning the risks specified in the road charges policy, as well as fees of a legal nature.
- All ancillary costs and expenses incurred by the Insured with the written consent of the relevant insurance company
- The out of pocket expenses of altering or destroying 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 road charges insurance, to the extent that such costs are rendered abortive by court order.
- Loss in market value resulting from the successful enforcement of the risks specified in the road charges indemnity insurance.
As is the case with all conventional insurance, all material information needs to be disclosed to the insurance company at the outset and throughout the policy term, otherwise the road charges policy will be invalidated.
Road Charges Indemnity Insurance has limitations - Supplemental considerations
Road Charges insurance may satisfy lenders such as Yorkshire Building Society or Chelsea BS 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. 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 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 road charges 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.