When you’re buying a house or a flat, you may think you have more than enough to handle with surveys, searches and legal fees. However, in some circumstances your solicitor may advise you to add indemnity insurance to that list. If you’ve already arranged buildings insurance, this might sound puzzling, but it’s worth taking time to consider whether this provision might apply to you.
Indemnity Insurance Explained
It’s possible that some feature of the property you are buying or some element of your ownership will affect someone else. Equally, something for which you are now responsible may raise liability to a third party. Indemnity insurance will not cover the cost of putting right anything which is the subject of an objection but is designed to cover the cost of any damages claim upheld against you.
An example is a restrictive covenant, which imposes limits on your use of the property. Often these were imposed decades ago and are highly unlikely to be enforced, but insurance protects you should the unlikely occur. Other matters include inadequate planning permission, non-compliance with building regulations, boundaries and rights of access. These all pre-date your purchase, but as the owner they are now your responsibility. If you do not have documentary evidence of things like regulatory compliance or settled rights, then insurance is a simple cost-effective solution.
A recent development in 2021 aimed at speeding up transactions is no-search indemnity insurance, which can replace the need for definitive answers to local authority searches. Whether this will become established practice is unclear.
If you’re looking to buy a property in Hemel Hempstead you’ll know that there are many houses that date from the 19th century and earlier, which means some of the examples we’ve considered could easily arise. You can rest assured that when you’re searching for conveyancing solicitors Hemel Hempstead is well served by practitioners who are very familiar with these issues.
Do You Need It?
While it can be useful, insurance isn’t always necessary. Issues that concern you may not be significant. To local conveyancing solicitors Hemel Hempstead and its property profile are very familiar, so they will already be looking for complications.
Ultimately, you want to enjoy trouble-free ownership of your property. If a legal flaw can be easily fixed, then the best advice might be to fix it. For everything else, indemnity insurance is a very useful alternative.