Mining and Mineral Rights Indemnity Insurance Mortgage Company conveyancing requirements
Yorkshire Building Society and Santander, as with most banks, dictate their own requirements when it comes to mining and mineral rights indemnity insurance. This page sets out to enlighten conveyancing practitioners on the numerous bank conveyancing panel where the title to be charged contains mining and mineral rights. Solicitors should still check the CML handbook requirements for each mortgage company, for example Nationwide, Godiva Mortgages or Barclays. The information on this page Is not to be read as mining and mineral rights indemnity insurance advice.
Need help with mining and mineral rights indemnity insurance from your lender?
Accord and Yorkshire Bank Home Loans in common with many mortgage companies, obligations require that where mining and mineral rights indemnity insurance is to be put on risk:
- your firm must approve the terms of the mining and mineral rights policy on behalf of the bank
- your practice must provide a duplicate of the mining and mineral rights indemnity insurance to the borrower and explain to the mortgagor why the mining and mineral rights indemnity insurance policy was effected and that additional insurance could be required if there is further borrowing against the mortgaged property
- the mining and mineral rights indemnity insurance policy must not contain terms that you know would void or prejudice the interests of the mortgage company
- your practice must disclose to the insurer all relevant information which you have gathered
- the mining and mineral rights indemnity insurance policy should always be for the benefit of the lender and, wherever possible, in favour of the borrower and any subsequent registered proprietor or mortgagee. Where the mortgagor will not be protected by the mining and mineral rights indemnity insurance policy, you must advise the borrower of this fact.
- the mining and mineral rights indemnity insurance policy should be placed on risk without expense to the lender
- the limit of indemnity must satisfy the requirements for the mortgage company (See Part II Handbook requirements )
- your practice is duty bound to point out to the borrower that the borrower is obliged to comply with 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 respect of the insurance
| Lender | Requirement |
|---|---|
| Aviva Equity Release | Full value of the property. |
| Bank of Scotland | Not less than mortgage advance plus 10% |
| Bank of Scotland Private | [This lender has not published an answer to this question. Please contact the lender.]
|
| Bluestone Mortgages | An amount at least equal to the total mortgage advance. Any indemnity insurance policy must protect the borrowers, any successors in title and any mortgagee. |
| Clydesdale Bank | Open market value of property. |
| HSBC UK Bank | The value of the insurance must be for at least the full value of the property |
| Halifax | An amount at least equal to the mortgage advance. |
| Hampden | The open market value of the property according to the valuation report. |
| Hinckley and Rugby | The policy must be for our benefit and for no less than the amount lent to the borrower, including retentions, stage payments and interest. |
| JPMorgan | 110% of principal sum. |
| Mortgage Express | Amount of loan + 15% |
| Nationwide Building Society | Purchase Price (valuation if price is at a discount). Contact Issuing Office for advice on a remortgage |
| New Street Mortgages | Must be for a minimum of 110% of the purchase price or valuation whichever is the greatest. |
| Pepper Money | An amount equal to at least 110% of the purchase price or value, whichever is higher. Any indemnity insurance policy must be for our benefit, that of any transferee/assignee (legal or equitable) of the mortgage and also the borrower(s). |
| Platform | 110% of principal sum. |
| Reliance Bank | \xA31,000,000.00 |
| Skipton Building Society | For lender only cover we will accept a minimum of 110% (index-linked) of the amount of the loan. |
| St James Place | An amount at least equal to the total of the initial mortgage advance plus any pre-agreed reserve. These amounts will be shown in the mortgage offer. |
| The Mortgage Works | The full purchase price/value of the property whichever is higher |
| Royal Bank of Scotland | An amount equal to the value of the property. |
General Mining and Mineral Rights indemnity insurance points to consider
The extent of the terms for mining and mineral rights indemnity insurance are identified in the policy paperwork. Property lawyers should direct your non-lender client to the mining and mineral rights indemnity insurance policy paperwork. The intention of mining and mineral rights indemnity insurance is to afford indemnity in respect of the risks specified in the policy schedule - so it’s important to check any draft to ensure it is as it should be. The continuance of this non-investment insurance agreement is in perpetuity unless the policy says something to the contrary. Again, please check that this is as you expected.Significant features and benefits of mining and mineral rights Contingency insurance :
Protection via such a policy is to cover the risk of third parties looking to enforce rights that can affect the use of a property. Mining and Mineral Rights indemnity insurance Cover normally includes- The cost of altering or destroying 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 in respect of the risks specified in the mining and mineral rights policy, including legal and associated costs.
- 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.
- All ancillary costs and expenses incurred by the Insured with the written consent of the relevant insurance company
- Loss in market value resulting from the successful enforcement of the risks specified in the mining and mineral rights insurance.
- The cost of works (including architects’ and surveyors’ fees) for the purpose of the development begun, or contracted for, 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.
As is the case with all conventional insurance, all material information needs to be disclosed to the insurance company at the outset and throughout the policy term, otherwise the mining and mineral rights policy will not be valid.
Mining and Mineral Rights Indemnity Insurance has limitations - Additional considerations
There may be consequences arising from the enforcement of the risks identified in the mining and mineral rights insurance which are not adequately covered by financial compensation. Information contained within this webpage is for general information for conveyancers and solicitors in England and Wales on the the bank approved panel, it does not constitute advice for members of the public who should contact their lawyer for advice relating to the bank 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 above information covers to properties in England and Wales.