Search Delay Indemnity Insurance

monkey84

My boyfriend and I are fairly close to exchanging on our first property. We are waiting on the local authority search, which could take another two weeks to arrive. Our solicitor has suggested that we might like to take out Search Delay Indemnity Insurance to allow us to exchange without the local authority search. We have been sent a policy summary for the insurance, but the wording is extremely vague. I had thought that, should something unpleasant be revealed in the search, this policy would allow us to pull out of purchasing after exchanging contracts without losing our deposit. However this isn't the case, the summary simply states that the policy will provide protection for financial loss that might arise in relation to an onerous search result. Can anyone advise as to what this means in reality? If, for example the local authority search were to reveal that a large shopping centre was going to be built opposite our flat (very unlikely, but possible ) and this would adversely affect the value of the property, would we then be able to claim on the policy for the difference between the price at which we bought the flat and the price that we could now sell it at?
I'm not sure that I'd want to live in the property if something 'onerous' came up in the search, even if we would be financially compensated for this.
I really can't work out whether this insurance is worth getting or is just a gimmick to speed up the house buying process. Thanks very much for any guidance.

sharpee

Is two weeks really to long to wait for what will be one of the biggest purchases you will ever make.

Why not just wait the 2 weeks?

DVardysShadow

This is 'fools rush in where angels fear to tread' insurance. Partly because it insures fools who rush in to buying a house and partly because angels would not buy insurance where the conditions for a payout are vague.

Insurances are generally expressed in terms of a payout and a risk in quite clearcut terms - eg life insurance, <person> dies and his estate is paid <£££>

monkey84

Thanks very much to all for your replies

@sharpee - we're happy to wait for the two weeks. It's more a case as to whether the seller will get fed up with being kept waiting and decide to pull out of the purchase. To tell the truth though, we're not being pushed by him/his solicitor. It's the estate agent who is hassling us.

@timmyt. We are based in North London. Get the impression that the authority has a reputation for being slow in these matters. Thanks for the breakdown of what the local search will bring up. This is all stuff that I would like to know about before buying. Do have any idea how the insurance company would work out the loss in value of the property? Would they send round a surveyor to judge?

@DVardysShadow. This has really confirmed what I presumed. I have bought various insurance policies before and none have ever been as vague as this.

Fingers crossed it'll all work out.

Linus2864

monkey84 wrote: »

To tell the truth though, we're not being pushed by him/his solicitor. It's the estate agent who is hassling us.

Your and your seller's solicitors are (or should be) concerned about making sure the purchase is watertight such as all finance being in place, access rights, boundaries, any restrictive covenants in place, legal issues etc etc, and this can take a bit of time.

The estate agent is hassling you as they want their commission from the sale.

Also bear in mind that the search involves navigating the local authority bureaucracy and red tape - after our recent exchange I'm surprised any sales actually manage to complete!

Hope it all goes well and best wishes