Is good leasehold insurance a scam?

Folksriker

Is good leasehold insurance a scam? Has anyone ever heard of it ever having to be paid out? How would it even work, someone comes along who's the great great grandson of someone who held the freehold in 1800 with a piece of yellowed parchment and a court gives them my house? Is that really going to happen? I'm imagining my lender will probably force me to get it regardless but it would be nice to know if it's literal money down the drain

user1977

How much is it costing? It's not a "scam", it does provide the cover it says it does, but generally these things are dirt cheap because the risk is tiny.

Folksriker

user1977 said:

How much is it costing? It's not a "scam", it does provide the cover it says it does, but generally these things are dirt cheap because the risk is tiny.

I don't know, forcing people to buy insurance for something which I'm far as I'm aware has never been recorded as having happened and never will is pretty scammy to me. I haven't been told the cost yet but online calculators typically call it about £150, which isn't a small amount to spend on what is essentially insurance against my house being stolen by aliens. If it turns out this has ever happened then I'll stand corrected

bouicca21

I’d want to know just what the insurance would cover in the unlikely event of a claim being made.  And if I decided to proceed I’d be researching the history of the property - lease and release was a form of conveyancing back in the dim and distant past and it’s possible you have as it were half the story, and that somewhere along the line the release got lost.  But I’m not sure when it stopped and whether it was still in use in 1800.

canaldumidi

Much the same as with indemnity insurance for lack of building regs on non-recent works.

user1977

I don't know much about cover in relation to good leasehold, but generally, claims under indemnity policies certainly do happen (I've acted for insurers in sorting them out). Bear in mind the insurers are taking on the risk that things aren't quite as everybody assumes e.g. perhaps the neighbours are just about to pounce in relation to the long-standing boundary discrepancy, or perhaps those historic alterations aren't quite as old as everybody thinks.

loubel

If you are getting a mortgage then the insurance will be required whether you want it or not because your lender will want assurance that the title is good enough. It is a standard lender instruction where title to the freeholder was not available at the grant of a lease. Chances of a claim might be slim to none but that doesn't make it a scam.