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What is indemnity insurance for house buyers and owners?

Indemnity insurance is a certain type of cover for a home when there's a defect in the property or title. It's not a "quick fix" to problems but rather a financial solution to cover the property owner should they require it. Indemnity insurance can cover instances where:

  • Planning permission wasn't sought for something on the property.
  • Windows were installed without a FENSA certificate.
  • The owner only has possessory title of the property.
  • Building regulations were not sought for the property, or certain aspects of the home.
  • A property overhangs over a neighbourhood property.
  • Chancel repair payments are required without the owner's prior knowledge.

In most cases you can only apply for indemnity insurance after 12 months of building work being carried out in the case of planning permission or window insurance, and must have used the property as a residential dwelling. If a local authority has connected you regarding any of the above before taking out indemnity insurance, you cannot apply.

What is Indemnity Insurance for House Buyers?

Indemnity insurance for buyers is a legal form of financial protection for anyone looking to purchase a house. If they are aware of a defect and a local authority has not been made aware they can apply for indemnity insurance to cover any financial loss in the future, or to cover the value of the home. Normally, the previous property owner will take out indemnity insurance before selling a home (in some cases, such as windows without a FENSA certificate, indemnity insurance is legally required to sell the home) and it is not normally the responsibility of the buyer. However, a buyer can take out indemnity insurance on their own accord.

How Much Does Indemnity Insurance Cost?

Costs vary from policy to provider. You should expect to make a one-off payment for indemnity insurance, which will remain for the duration of the property's life. Some forms of indemnity insurance cost as little as £20.

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