indemnity insurance

[mexico2003]

we are looking to purchase a propery but have been told that it has an indemnity insurance on the extension as it did not receive full planning permission. Could you inform us what this means and whether it is wise to buy such a propery with this kind of insurance and what the risks may be.

[Vinyl Lionel]

Having an indemnity in place means that the extension is then insured against structural defects. So whether you stay in the property or sell it on, the owner can claim against the policy should anything structural need doing on the extension. As with all indemnities, they are put in place to defer any liability onto the shoulders of an insurance company subject to certain conditions. Check the small print of the policy but that is essentially it. :-)

[Golden Shred]

No, that is not it. Whilst the indemnity Insurance referred to is paid up you can recover your costs and loss in the event that your local Planning Authority refuse retrospective planning permission for the extension and/or enforce demolition or alterations. The insurance will have a limited life, usually 12 or 24 months. During that period it is advisable for you to apply for retrospective pp, otherwise at the end of the insurance you carry the risk alone. There is some information at http://www.planningni.gov.uk/Devel_Control/Pla nning_System/Enforcement.htm . Budget between �300 and �1,000 depending upon the amount of information/drawings/site investigation the planners require.

[2825]

Indemnity insurance is applied to almost every purchase. It is to insure the mortgage company against the value of your property going down and you defaulting on the repayments. In other words it is insurance for the mortgage company that you pay the premiums for. Your mortgage is a loan secured on the property that you are buying.