Seller Pulled Out of Purchase & Home Buyer Protection Insurance Claim Rejected

bbluvbb

Hi all,

I’m seeking advice regarding a frustrating situation with my home purchase and claim under Home Buyer Protection Insurance. I was in the process of buying a property, and everything was moving along, but the seller suddenly pulled out before exchanging contracts. Thankfully, I thought I’d be covered for costs I’d incurred (solicitor and mortgage broker) under my Home Buyer Protection Insurance.

I submitted the following documents to my insurance company for the claim:

1. DIP, MOS, and ESIS documents
2. Invoices for costs:
   • EC Mortgage (Broker)
   • RLK Solicitors
3. An email from the seller's solicitor confirming that the seller had aborted the transaction.

Unfortunately, the claim was rejected as they said I didn’t provide an official letter of withdrawal from the seller’s solicitor. The issue is, the seller's solicitor only sent me an email confirming the decision to pull out, and despite repeated attempts, they’ve ignored my requests for a formal letter.

Has anyone else dealt with this? Any advice on how to proceed or how I can push the insurance company to accept the seller's email as sufficient? I feel stuck at this point.

Thanks for any help!

housebuyer143

Where does it say in the T&C's you need a formal letter of withdrawal? If it's not there, then they are just trying to get out of paying and I would raise a complaint. 

eddddy

The IPID you've shown says you should refer to the policy wording for full T&Cs - is that any more specific?

The insurance company should be regulated by the FCA, so you should be able to complain to the Financial Ombudsman - but you would need to make a formal complaint to the insurance company first.


This doesn't help you in any way, but Home Buyer Protection Insurance has always looked like a super-dodgy market to me (a bit like PPI). I've never come across anyone who has successfully claimed. But I've come across a number of people who've said their claims were refused for spurious reasons.

RHemmings

I'm surprised that this is a policy that doesn't cover gazumping. I thought that gazumping was one of the major reasons for home buying insurance, and a quick google suggests that it's often called 'gazumping insurance'. It looks to me that this is a policy designed not to pay out. 

As everyone above says, the exact wording of the T&Cs is important. 

sheramber

RHemmings said:

I'm surprised that this is a policy that doesn't cover gazumping. I thought that gazumping was one of the major reasons for home buying insurance, and a quick google suggests that it's often called 'gazumping insurance'. It looks to me that this is a policy designed not to pay out. 

As everyone above says, the exact wording of the T&Cs is important. 

ist itme on list of what is covered, with the restriction of £1000 minimum  difference

user1977

The difficulty with the policy appears to be that it requires knowledge of the reason for the vendor's withdrawal from negotiations (as some reasons are covered and others aren't), and you're not necessarily going to have even informal evidence of why they've withdrawn (do you actually have any idea why they pulled out?).

We have discussed these policies several times before on the forum and they appear to be of limited value. 

DullGreyGuy

bbluvbb said:

Hi all,

I’m seeking advice regarding a frustrating situation with my home purchase and claim under Home Buyer Protection Insurance. I was in the process of buying a property, and everything was moving along, but the seller suddenly pulled out before exchanging contracts. Thankfully, I thought I’d be covered for costs I’d incurred (solicitor and mortgage broker) under my Home Buyer Protection Insurance.

I submitted the following documents to my insurance company for the claim:

1. DIP, MOS, and ESIS documents
2. Invoices for costs:
   • EC Mortgage (Broker)
   • RLK Solicitors
3. An email from the seller's solicitor confirming that the seller had aborted the transaction.

Unfortunately, the claim was rejected as they said I didn’t provide an official letter of withdrawal from the seller’s solicitor. The issue is, the seller's solicitor only sent me an email confirming the decision to pull out, and despite repeated attempts, they’ve ignored my requests for a formal letter.

Has anyone else dealt with this? Any advice on how to proceed or how I can push the insurance company to accept the seller's email as sufficient? I feel stuck at this point.

Thanks for any help!

Did the email state the reason for them withdrawing?

What does the full policy terms state about information required? Do you have a link to it? 

bbluvbb

Thank you all for your suggestions. The email from the vendor didn’t state the exact reason for pulling out in the email, but we know it was because they wanted to finalise the sale as quickly as possible. While we were still waiting for the bank to approve our mortgage, the vendor decided not to wait and chose to remarket the property.

I’ve reviewed the terms and conditions, checked what’s insured, and confirmed that I meet the criteria.

We will, subject to what is not insured, the claims provisions and conditions of this policy

pay the costs and expenses following the purchase of the property failing as a result of

an insured incident shown as operative in the schedule.

Provided that:

1. the full premium has been paid.

2. the date of occurrence is during the period of insurance.

3. any claim is reported to us:

a. during the period of insurance.

b. immediately after you became aware of circumstances which may give rise to a

claim.

4. you do not deliberately and knowingly cause a delay or use unreasonable behaviour

that results in the failed purchase.

5. the purchase of the property is not subject to a contract race or sealed bids.

6. you are using a solicitor to conduct the conveyancing of the property.

7. you have not had a survey carried out on the property.

8. you have made an offer to purchase the property and that offer has been accepted by

the vendor or their agent in writing.

9. an application for any mortgage on the property has been agreed in principle.

10. the policy is issued no later than three working days from the date on which you first

instruct a solicitor.

it does not have the wording of official letter is needed from the T&Cs

Insured incidents

1. Withdrawal from the sale by the vendor because of gazumping

The vendor withdrawing from the sale following receipt and acceptance of an alternative

offer providing that the alternative offer is at least £1,000 greater than the property price.

2. Withdrawal from the sale by the vendor for other reasons

The vendor withdrawing from the sale for reasons other than set out in paragraph 1 above

and which are beyond your reasonable control.

We will not pay for any claim:

a. Where the vendor withdraws from the sale due to any delays, action or inaction

caused by you or your solicitor.

b. Where you failed to obtain a mortgage offer.

user1977

bbluvbb said:

While we were still waiting for the bank to approve our mortgage, the vendor decided not to wait and chose to remarket the property

So sounds to me like either a "delay, action or inaction caused by you..."
or "Where you failed to obtain a mortgage offer." ?

NervyBuyer

#7 - You hadn't had a survey by that point?

Albermarle

The email from the vendor didn’t state the exact reason for pulling out in the email, but we know it was because they wanted to finalise the sale as quickly as possible. While we were still waiting for the bank to approve our mortgage, the vendor decided not to wait and chose to remarket the property.

I would not be surprised if the insurer tries to claim it was your fault the vendor pulled out, as you were slow in getting into a position to buy.

2. Withdrawal from the sale by the vendor for other reasons

The vendor withdrawing from the sale for reasons other than set out in paragraph 1 above

and which are beyond your reasonable control.

You could argue that it was in your reasonable control to get a mortgage in place quicker.

Just playing Devil's Advocate by the way !