Restrictive Covenant Indemnity Insurance Policy Cost

Restrictive covenant indemnity insurance is a form of legal protection for homeowners and buyers. When a developer wants to build on a plot of land the deeds might place a restrictive covenant on the land from previous owners, denying any building work or development on the land. However, if the owner of the land who placed the restrictive covenant can't be located then the developer won't abandon to project completely; they'll carry on and pay restrictive covenant indemnity insurance cost or fees to cover themselves legally should the restrictive covenant be enforced in the future.

In another instance a homeowner may suddenly realise that they are in breach of a restrictive covenant and might take out restrictive covenant indemnity insurance to cover the cost or any financial loss they may incur from third parties.

Restrictive Covenant Indemnity Insurance Cost

The cost for this kind of indemnity insurance varies but is normally calculated on a sliding scale in correspondence with the property value. A £200,000 home would expect to see a restrictive covenant indemnity insurance cost of around £200, but this varies for each provider. The premium is always a one-off payment.

Cheap Alternative

The reason why restrictive covenant indemnity insurance tends to cost far less than other insurance or solutions is because of the terms it's set on. You can't take out indemnity insurance if you have already been contacted by a third party regarding the breach of covenant and you're only covered up to a certain financial limit; if your home, for example, was actually removed because it was build on land with a restrictive covenant then your cheap indemnity insurance might not cover that cost entirely.

However, the low restrictive covenant indemnity insurance cost is also due to the fact that, in most cases, when the original deed owner who placed the restrictive covenant cannot be found it's normally because the covenant was put in place a long time ago. Some restrictive covenants can be implemented over 100 years ago, making it unlikely for third parties to take action. In a way, the provider of restrictive indemnity insurance is taking a low risk. However, restrictive covenant insurance should definitely be considered a valuable safety net if ever in doubt.

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