Are you planning to sell a house soon? Do you want to protect yourself from any potential problems after selling the house? If the answer to these questions is yes, you should seriously consider buying indemnity insurance.
Indemnity insurance can be purchased by both buyers and sellers. Even though it is not that popular, but it does save you against a range of potential issues after buying or selling a property. For example, consider a scenario where you have sold your house for a tidy sum a few months ago. However, the buyer has recently discovered some major issues with the house and has sent you a legal letter about these defects they have discovered in the property. They want you to cover the repair costs which would be in thousands.Â
Indemnity insurance has been devised for such scenarios and it protects you from huge legal costs when you are selling or buying a property. In case the buyer wasn’t informed about these defects before exchanging the contracts, it is possible that you might be found liable for these repair costs but if you have indemnity insurance, you will be covered.
Buying this insurance policy is simple and typically involves only a single payment, and you are protected forever. It offers you protection against a variety of potential issues such as building regulations, planning permission, restrictive covenant, adverse possession and many other such potential issues.
As far as the cost of indemnity insurance is concerned, it shouldn’t cost you much. In fact, it’s quite cheap when you consider the potential money you might have to pay to the buyer and in legal fees if the buyer sues you successfully. It is also important to mention here that you can buy indemnity insurance for many different issues and there is no umbrella policy that covers all the issues. Cost of the policy will depend on the issues you want to cover in the policy. If you want to protect yourself for issues such as building regulations or lack of planning, the policy is going to cost a lot more.
One of the most common things people want to know about when selling a property is whether it is necessary for them to buy indemnity insurance. There is no rule or law that requires sellers or even buyers to purchase indemnity insurance. It is completely up to you. However, it makes sense to buy a cheap insurance policy that offers quite a bit of protection if you run into legal issues after selling a property.Â
One of the reasons the cost of these policies is cheap is that most policies never pay out as usually, there are no problems. In fact, most of the buyers get inspection done in order to discover any potential problems with the property they are considering. However, it still makes sense for you to buy a basic policy to keep your peace of mind and make sure that you won’t have to deal with any legal costs later.
It is essential to buy this insurance policy in case there is even a slight chance that the property you are selling might have problems in future with land ownership, planning permission or building regulations or any other such issues. Indemnity insurance will protect you in such cases, but you’ll have to pay a hefty premium. However, the premium is going to be much lower than the legal fees you can expect to pay for dealing with such legal issues.
It is also recommended to buy indemnity insurance in order to sell a house quickly. This cover provides protection for a whole range of legal issues which means you do not need to worry too much about any missing permissions, certificates or paperwork. This is also the reason many mortgage providers also insist taking out an indemnity insurance policy to the seller.
Overall, the answer to the question whether you need indemnity insurance as a property seller is that you don’t actually need it as per law but there is a reason many experts in this business recommend sellers to buy a policy that doesn’t cost much. There are several providers of indemnity insurance and you could easily get a policy by using your favorite search engine. In fact, once you start dealing with mortgage providers, you will find out that there are many companies that offer such policies and it will be pretty easy for you to get a policy at an affordable price.
The only thing you need to consider is how much premium you need to pay. The premium will depend on the amount of protection you want for and the kind of protection you want. Get ready to pay significantly high premium if you want to get coverage for things that are likely to cost much in legal costs if those were to happen. However, a basic policy won’t cost much.
