Mortgage Company conveyancing panel conditions re Road Charges Indemnity Insurance
RBS and Coventry BS, like the majority of banks, set their own specific instructions when it comes to road charges indemnity insurance. This page is designed to help conveyancing practitioners on the various bank solicitors panel where the title for the the property to be mortgaged includes road charges. Solicitors should still check the CML handbook requirements for each lender, be it Halifax, Birmingham Midshires or HSBC. The content on this page Is not to be read as road charges indemnity insurance advice.
Need help with road charges indemnity insurance from your lender?
Lloyds TSB and Yorkshire Bank Home Loans like the majority of banks, instructions are such that where road charges indemnity insurance is to be put on risk:
- the minimum level of cover for the policy must satisfy the requirements for the lender (see UK Finance Lenders’ Handbook Part 2 )
- the road charges indemnity insurance policy needs to be in favor of the lender and, wherever possible, for the benefit of the mortgagor and any subsequent owner or mortgagee. If the mortgagor will not be protected by the road charges indemnity insurance policy, you must advise the borrower of this fact.
- your practice must approve the terms of the road charges policy on behalf of the bank
- your practice is required to reveal to the insurer all relevant information which you have obtained
- you is duty bound to point out to the borrower that the borrower must comply with any conditions of the road charges indemnity insurance policy and that the mortgagor should notify the lender of any notice or potential claim in respect of the insurance
- the road charges indemnity insurance policy should not contain terms that you recognise would void or compromise the interests of the bank
- the road charges indemnity insurance policy should be placed on risk at no expense to the mortgage company
- you must send a copy of the road charges indemnity insurance to the borrower and explain to the borrower why the road charges indemnity insurance policy was effected and that a further policy could be required if there is supplemental borrowing against the security of the property
| Lender | Requirement |
|---|---|
| Accord 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 mortgagee. |
| Adam & Company International | The open market value of the property according to the valuation report. |
| Aldermore Bank | 110% of the purchase price or valuation, whichever is greater. 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). Where a property is being sold at undervalue and an equity gift is being provided, the conveyancer must ensure the seller obtains an Insolvency Act Indemnity Insurance Policy and provides evidence to you, so that you are comfortable an appropriate policy is in place to Aldermore’s satisfaction. This indemnity insurance aims to cover Aldermore against any future claims by creditors of the seller that may challenge the sale. |
| Allied Irish Bank | At least the amount of the mortgage advance. |
| Aviva Equity Release | Full value of the property. |
| Darlington Building Society | The higher of value or purchase price of the property. |
| Family Building Society | An amount at least equal to the mortgage advance. |
| First Direct | The value of the insurance must be for at least the full value of the property |
| Godiva Mortgages | Minimum of the value of the property. |
| HSBC UK Bank | The value of the insurance must be for at least the full value of the property |
| Hodge | 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. |
| LendInvest | An amount at least equal to the valuation of the property. |
| Manchester Building Society | Purchases- higher of the Purchase price & valuation Re-mortgages- Loan x 115%. |
| Paragon Mortgages Ltd | An amount at least equal to the stated value of the Property. |
| Parity Trust | An amount equal to at least 110% of the mortgage advance |
| Reliance Bank | \xA31,000,000.00 |
| RBS - Direct Line One | An amount equal to the value of the property. |
| RBS (One Account) | An amount equal to the value of the property. |
| RBS - Virgin One | An amount equal to the value of the property. |
| Topaz Finance | Valuation or purchase price, whichever is higher. The policy must always benefit the borrower and any subsequent owner or mortgagee - the policy must be index linked. |
Non lender-specific considerations
The full terms, conditions and exclusions for road charges indemnity insurance are shown in the policy paperwork. Conveyancing solicitors are obliged to point 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 specified 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 contract is in perpetuity unless the policy says something to the contrary. It is well worth checking that the time frame is correct.Road Charges indemnity insurance: Significant characteristics and benefits:
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. Road Charges indemnity insurance Policies are likely to cover the following- All sums paid with the written consent of the insurance company to free the property from the risks specified in the road charges insurance.
- The cost of works (including professional fees) for the purpose of the development begun, or contracted for, prior to proceedings for the enforcement of the risks specified in the road charges policy, to the extent that such costs are rendered abortive by court order.
- 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.
- Cover for compensation incurred in any action concerning the risks specified in the road charges policy, including legal and associated costs.
- Market value reduction due to the successful enforcement of the risks specified in the road charges insurance.
- All other costs and expenses incurred by the Insured with the written consent of the relevant insurance company
You also need to be sure that the answers on the application form are accurate. However remote the likelihood of a claim on the lender insurance policy might be you can be sure that the insurer will check the details on any proposal form thoroughly prior to any claim being paid out.
Supplemental considerations for road charges indemnity insurance
Bear in mind, that if a covenant is breached and changes have to be made, simply getting monetary compensation from road charges insurance may be adequate for your client. Information provided on this webpage is for general information for Regulated law firms in England and Wales on the the bank 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 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.