Indemnity Insurance of Mining and Mineral Rights Mortgage Company conveyancing requirements
Halifax and Lloyds TSB, in common with most mortgage companies, set their own specific instructions when it comes to mining and mineral rights indemnity insurance. The purpose of this page to assist conveyancing lawyers on the numerous lender approved list of panel lawyers where the title to be charged incorporates mining and mineral rights. It is not a substitute for checking the CML handbook requirements for each bank, whether it be Leeds Building Society, Coventry BS or Godiva Mortgages. The content on this page is not focused on mining and mineral rights indemnity insurance requirements.
Need help with mining and mineral rights indemnity insurance from your lender?
Skipton and RBS as with many banks, requirements are that where mining and mineral rights indemnity insurance is to be taken out:
- the mining and mineral rights indemnity insurance policy should always be in favor of the mortgage company and, wherever possible, for the benefit of the borrower and any future owner or mortgagee. If the mortgagor will not be covered by the mining and mineral rights indemnity insurance policy, you must advise the mortgagor of this fact.
- the mining and mineral rights indemnity insurance policy should not incorporate terms which you recognise would invalidate or compromise the interests of the lender
- your practice is required to reveal to the insurer all relevant information which you have gathered
- you must approve the terms of the mining and mineral rights policy on behalf of the lender
- the minimum level of cover for the policy must meet the requirements for the bank (see UK Finance Lenders’ Handbook Part 2 )
- your practice must send a duplicate of the mining and mineral rights indemnity insurance to the borrower and explain to the borrower why the mining and mineral rights indemnity insurance policy was effected and that additional insurance may be required if there is additional borrowing against the mortgaged property
- the mining and mineral rights indemnity insurance policy must be effected at no expense to the lender
- your practice must point out to the mortgagor that the borrower is obliged to adhere to any conditions of the mining and mineral rights indemnity insurance policy and that the mortgagor should notify the mortgage company of any notice or potential claim in relation to the insurance
| Lender | Requirement |
|---|---|
| Barclays plc | Higher of purchase price or valuation |
| Birmingham Bank | completions@birminghambank.com |
| Coutts Finance | The open market value of the property according to the valuation report. |
| Darlington Building Society | The higher of value or purchase price of the property. |
| Godiva Mortgages | Minimum of the value of the property. |
| HSBC UK Bank | The value of the insurance must be for at least the full value of the property |
| Habito | Higher of purchase price or valuation |
| Halifax | The value of the property. |
| Hampden | The open market value of the property according to the valuation report. |
| Kensington Mortgage | Must be for a minimum of 110% of the purchase price or valuation whichever is the greatest. |
| Landmark | Preference for full market value of the property, but if this level of cover is not available, will accept a minimum of the actual loan amount. You must approve the policy on our behalf. |
| MPowered Mortgages | Either the minimum reinstatement value or where there is no valuation the market value/purchase price figure (whichever is higher). |
| ModaMortgages | An amount at least equal to 110% of the mortgage valuation. |
| Mortgage Express | Amount of loan + 15% |
| Paratus | An amount equal to 110% of the valuation or purchase price - whichever is the greater. |
| Scottish Building Society | Amount of mortgage plus 25%. |
| State Bank of India UK | The purchase price or value of the property, whichever is the higher. |
| Swansea Building Society | Purchase price or market valuation whichever is the higher |
| RBS - Direct Line | An amount equal to the value of the property. |
| Vida Homeloans | It must be for a minimum of 110% of the purchase price or valuation, whichever is greater |
Non lender-specific considerations
The full terms, conditions and exclusions for mining and mineral rights indemnity insurance are identified in the policy paperwork. Conveyancing Practitioners should point the borrower to the mining and mineral rights indemnity insurance policy itself. Mining and Mineral Rights indemnity insurance is devised to provide indemnity in respect of the risks specified in the policy schedule - so it is essential check the document to ensure it is correct. The lifetime of this non-investment insurance contract is in perpetuity unless otherwise stated in the mining and mineral rights indemnity insurance policy. Again, please check that this is as you expected.Significant features and benefits of mining and mineral rights Contingency insurance :
This policy would usually provide protection from financial loss that might arise in the event of a third party making a cliam in respect of the risks identified in the policy document. Mining and Mineral Rights indemnity insurance Policies should be checked for the following- All other costs and expenses incurred by the Insured with consent in writing from the relevant insurance company
- Loss in market value due to the successful enforcement of the risks specified in the mining and mineral rights policy.
- The cost of works (including professional fees) for the purpose of the development started, prior to proceedings for the enforcement of the risks specified in the mining and mineral rights indemnity insurance, to the extent that such costs are rendered abortive by court decision.
- Money paid with consent in writing from the insurance company to free the land from the risks specified in the mining and mineral rights indemnity insurance.
- The out of pocket expenses of altering or taking down all, or part of the development and the reinstatement of the land, insofar as such alteration, demolition or re-instatement is made necessary by court order.
- Cover for compensation incurred in any action concerning the risks specified in the mining and mineral rights indemnity insurance, as well as fees of a legal nature.
Due diligence should extend to checking that the answers on the application form are accurate. Regardless of how remote a claim on the bank insurance policy might be you can certain that the insurer will check the details on any proposal form thoroughly before any claim is admitted.
Mining and Mineral Rights Indemnity Insurance has limitations - Other considerations
Mining and Mineral Rights Indemnity policies can provide effective protection, but non-lender clients should be asked to give pause for thought and consider that the consequences of not being able to enjoy the property as anticipated may mean that mining and mineral rights indemnity cover will not necessarily be the right solution. Content on this webpage is for general information for conveyancers and solicitors in England and Wales on the the lender conveyancing panel, it does not constitute advice for members of the public who should contact their lawyer for advice relating to the mortgage company indemnity insurance. Whilst we endeavour to keep the information up to date and correct we do not make any representation or warranties of any kind about its completeness, accuracy, reliability or suitability. Any reliance you place on the information is strictly at your own risk. Lexsure will not be liable for any direct or indirect loss or damage arising out of or in connection with the use of this information.
An important exclusion applying to most mining and mineral rights Policies is if you make any contact with any party who might cause a claim under the Policy, it can invalidate the cover.
The content set out above covers to properties in England and Wales.