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can someone explain what indemnity insurance does?

aoleks · 2021-08-27 09:48:33

hi all, I thought I understood indemnity insurance policies, but some things don't add up. let's imagine a case of a structural alternation (extension or garage) ignoring a restrictive covenant or simply not having planning permission (let's say PP is required for that modification). if I was to buy that property, my…

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user1977 Posts: 17,840 Forumite

28 August 2021 at 9:36PM

Shaztastic3000 said:

Thrugelmir said:

aoleks said:

what does an indemnity insurance do, more precisely?

Protects your lender. As it's their money that you are using to buy the property. The property needs to provide adequate security for the debt in the event of default, and a quick firesale being the optimal exit route.

This doesn’t answer the question - *how* does it protect the lender?

By paying out any loss they suffer if they repossess and suffer a shortfall because of the risk insured against.

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can someone explain what indemnity insurance does?

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