Buyer wants neighbour's insurance

antrobus

kingstreet wrote: »

It's a principle not a law, but there does have to be insurable interest. If there is no insurable interest, we'd all insure our worst enemy's house then go and burn it down before collecting our payout.

It used to happen when insurance first started in the 17th century.

Actually it is enshrined in law; the Marine Insurance Act 1906 to be precise. Tis all explained here, http://www.hmrc.gov.uk/MANUALS/gimanual/gim1050.htm.

Richard_Webster

First read the lease.

It probably says (but you need to check - every lease is different) that each lessee has to insure and produce evidence of it to the landlord when requested to do so. It might allow the other lessee to request details but probably won't.

The lease should go on to impose an obligation on the landlord to enforce the covenants in the other lease at the request and cost of the lessee wanting enforcement.

So the flat seller could ask the landlord to require the other lessee to produce the details. In practice this could take along time if the landlord refuses - and is it worth spending a a lot money and time going to court over the issue?

The fact that the other flat owner has produced the details before doesn't really help because up to date details are what is required.

The normal pragmatic answer is for the seller to pay for a one off contingent buildings insurance policy which typically could cost around £300. This pays out if it turns out that the other lessee is uninsured or under-insured. Can't really see why the buyer's solicitor is not going down that route.

kingstreet

antrobus wrote: »

Actually it is enshrined in law; the Marine Insurance Act 1906 to be precise. Tis all explained here, http://www.hmrc.gov.uk/MANUALS/gimanual/gim1050.htm.

Fair enough. My excuse is it's over 25 years since my ACII foundation course.

kingstreet

Seanymph wrote: »

I know you can insure someone else's life without their knowledge. I don't see why you couldn't insure their flat

Really? Can you give me an example of when that happened as I've never come across it. To do it, it would have to be written on a life of another basis and the life assured would have to sign the application to complete the contract and authorise the release of data under AMRA.

Under life of another, I'm pretty sure the insurer would investigate insurable interest quite closely.

I must confess my experience of LoA stuff is centred on keyman cover where insurable interest was probably secondary to the financial underwriting in establishing the "value" of the keyman. This was done to check he didn't have a significant share in the business to ensure the premiums would be treated as a business expense.

shayward

geri1965 wrote: »

She could have changed insurers since. Although I do not understand her complaining about not getting the documents back, I would have thought she'd give people a copy, not the originals!

I only asked for a copy as well, and even suggested that she just give me a photocopy that I would pay for!

We've always had fairly good relations with the people downstairs, so I am not sure why she is being like this.

I have spoken to my solicitor who has suggested taking out indemnity insurance.

I will also investigate just taking out my own policy against the neighbours property, which I do have an interest in as the floor to our flat is not a party wall, but is wholly owned by the flat downstairs.

Failing all that, I guess we'll have to get the freeholder to enforce the lease, but our freeholders are so useless. It takes weeks to get simple responses from them.

Thanks for the responses every-one.

Seanymph

My Mother in law insured the life of her son on the birth of our first child. He and I were both too young to care about life insurance at the time, and also too poor.

She told me she'd done it, for my reassurance should anything happen to him - that the policy was in her name, but he was the life insured - and that I wasn't to worry about anything happening to him.

She may have sought his signature, and no doubt he'd have signed if she'd asked, but she told me quietly and when he wasn't present, so I was left with the impression that she didn't get his approval, and he didn't know of the policy.

I never looked into it - but she said she'd taken it out for an 18 year term so our child would be over 18 when it expired. I just believed what she told me. She's a fairly canny lady, I think she was telling me the truth.

http://www.lv.com/lifeinsurance/lv-life/life_insurance_tips_and_advice/taking-out-life-insurance-on-someone-elses-life

there you go ; she had an 'insurable interest' in him. That's all you have to prove, that you are 'more than just a mutual friendship'.

kingstreet

Seanymph wrote: »

My Mother in law insured the life of her son on the birth of our first child. He and I were both too young to care about life insurance at the time, and also too poor.

She told me she'd done it, for my reassurance should anything happen to him - that the policy was in her name, but he was the life insured - and that I wasn't to worry about anything happening to him.

She may have sought his signature, and no doubt he'd have signed if she'd asked, but she told me quietly and when he wasn't present, so I was left with the impression that she didn't get his approval, and he didn't know of the policy.

I never looked into it - but she said she'd taken it out for an 18 year term so our child would be over 18 when it expired. I just believed what she told me. She's a fairly canny lady, I think she was telling me the truth.

http://www.lv.com/lifeinsurance/lv-life/life_insurance_tips_and_advice/taking-out-life-insurance-on-someone-elses-life

there you go ; she had an 'insurable interest' in him. That's all you have to prove, that you are 'more than just a mutual friendship'.

Industrial branch business. Premium and benefit limited. I should have thought of that. Just don't try getting £1m cover on Jim next door.

gingertips

I can understand your neighbour's frustration...if it was me I would tell her I completely understand her frustration & why shes saying no, but I would be willing to reinburse her for any expenses - say £20 to provide a photocopy, or to let me take a copy.

At the end of the day, this could cause the sale to fall through so £20 is a very good investment in my view!