We'd like to remind Forumites to please avoid political debate on the Forum... Read More » This is to keep it a safe and useful space for MoneySaving discussions. Threads that are - or become - political in nature may be removed in line with the Forum’s rules. Thank you for your understanding.

PLEASE READ BEFORE POSTING: Hello Forumites! In order to help keep the Forum a useful, safe and friendly place for our users, discussions around non-MoneySaving matters are not permitted per the Forum rules. While we understand that mentioning house prices may sometimes be relevant to a user's specific MoneySaving situation, we ask that you please avoid veering into broad, general debates about the market, the economy and politics, as these can unfortunately lead to abusive or hateful behaviour. Threads that are found to have derailed into wider discussions may be removed. Users who repeatedly disregard this may have their Forum account banned. Please also avoid posting personally identifiable information, including links to your own online property listing which may reveal your address. Thank you for your understanding.

📨 Have you signed up to the Forum's new Email Digest yet? Get a selection of trending threads sent straight to your inbox daily, weekly or monthly!

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…

Comments

user1977 Posts: 18,035 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.

0