Your browser isn't supported
It looks like you're using an old web browser. To get the most out of the site and to ensure guides display correctly, we suggest upgrading your browser now. Download the latest:

Welcome to the MSE Forums

We're home to a fantastic community of MoneySavers but anyone can post. Please exercise caution & report spam, illegal, offensive or libellous posts/messages: click "report" or email forumteam@.

Search
  • FIRST POST
    • mikeyp231987
    • By mikeyp231987 19th Jun 18, 4:53 PM
    • 33Posts
    • 2Thanks
    mikeyp231987
    Home Buyer's Insurance
    • #1
    • 19th Jun 18, 4:53 PM
    Home Buyer's Insurance 19th Jun 18 at 4:53 PM
    I'm in the process of buying a house and will be instructing a solicitor imminently. I'm seeing Home Buyer's insurance being offered in various places and it seems like a no-brainer to get this for only 50. I'm wondering if anyone has ever actually taken this out? It says 3 in 10 house purchases fall through so given them numbers I figured at least a few on here might have experienced it and if they had insurance had to make a claim? Was it successful and did they pay out?

    https://hoa.org.uk/advice/guides-for-homeowners/i-am-buying/homebuyer-protection-insurance/
    Last edited by mikeyp231987; 19-06-2018 at 4:55 PM.
Page 1
    • eddddy
    • By eddddy 19th Jun 18, 8:56 PM
    • 6,726 Posts
    • 6,605 Thanks
    eddddy
    • #2
    • 19th Jun 18, 8:56 PM
    • #2
    • 19th Jun 18, 8:56 PM
    Well... based on the information they provide, they must be telling fibs...

    it seems like a no-brainer to get this for only 50.

    ...It says 3 in 10 house purchases fall through...
    Originally posted by mikeyp231987
    So for every 10 policies they sell at 50:
    • Their income is 10 x 50 = 500
    • They have an average of 3 claims at 1000 plus each. So they pay out a total of 3 x 1000 = 3,000

    Insurance companies aren't charities, they will be selling these policies to make a profit. (i.e. Earn more in income than they pay out in claims.)

    So their terms/exclusions must mean that they pay out much less often than 3 in 10 policies.
    • G_M
    • By G_M 19th Jun 18, 9:07 PM
    • 44,940 Posts
    • 53,555 Thanks
    G_M
    • #3
    • 19th Jun 18, 9:07 PM
    • #3
    • 19th Jun 18, 9:07 PM
    Read the small print.

    What do they actually cover?
    What costs do they include/exclude?
    In what exact circumstances would they pay out?
    What are the exclusions?

    I've no experience of them myself but suspect strongly that the fact they are never mentioned (positively or negatively) on this forum means very few pepe take them out.


    I wonder why.....?
    • mikeyp231987
    • By mikeyp231987 20th Jun 18, 10:57 AM
    • 33 Posts
    • 2 Thanks
    mikeyp231987
    • #4
    • 20th Jun 18, 10:57 AM
    • #4
    • 20th Jun 18, 10:57 AM
    What is covered:

    The insurer will pay your conveyancing costs, mortgage arrangement
    fees, lenders fees, survey fees incurred by you and subject to the limit
    of indemnity in the event of the following:
    !!!61623; the property is withdrawn from sale by the vendor for reasons
    beyond your control;
    !!!61623; the vendor receives and accepts an offer which is at least 1,000
    greater than the offer they have accepted from you;
    !!!61623; a local authority search highlights that the property is subject of a
    compulsory purchase order;
    !!!61623; the vendor is not legally entitled to sell you the property;
    !!!61623; you or the person purchasing the property with you, die, are made
    redundant or are relocated, and you are unable or unwilling to
    continue with the purchase of the property;
    !!!61623; the initial mortgage lender!!!8217;s valuation is less than 90% of the sum
    you have offered for the property which has been accepted by the
    vendor;
    !!!61623; prior to the release of funds the mortgage lender insists on
    rectification work to the property and the cost exceeds 10% of the
    sum offered by you which has been accepted by the vendor;
    !!!61623; the mortgage lender applies a retention on the loan which is more
    than 10% of the sum offered by you which has been accepted by
    the vendor; or
    !!!61623; the property is damaged during the period of cover and the cost
    of rectification work exceeds 10% of the property value.

    What is not covered:

    The insurer will not be liable for any costs and expenses:
    !!!61623; incurred before the start date;
    !!!61623; if you withdraw from the purchase of the property for any reasons
    other than those specifically covered by this policy;
    !!!61623; if you are aware of a previous survey having been carried out to the
    property up to 90 days prior to the start date that may give
    reasonable cause for the purchase to fail;
    !!!61623; if you are aware, prior to the start date, of any circumstances which
    could lead to a claim being made under this policy;
    !!!61623; if you deliberately and knowingly cause a delay or use unreasonable
    behaviour that results in the failed purchase;
    !!!61623; where they can be reimbursed by your employer or where your claim
    is covered by another policy;
    !!!61623; where you are able to obtain a refund of costs which you have
    incurred; or
    !!!61623; where, in the case of redundancy: you are self-employed, a
    company director or partner of the company giving notice of
    redundancy, or, the redundancy is voluntary.
    • ACG
    • By ACG 20th Jun 18, 11:17 AM
    • 17,313 Posts
    • 9,177 Thanks
    ACG
    • #5
    • 20th Jun 18, 11:17 AM
    • #5
    • 20th Jun 18, 11:17 AM
    We do not see 30% of cases fall through.
    Maybe 5%.

    But if it falls through, you can be out of pocket anywhere from nothing up to thousands. We had one recently which was particularly bad one and our customer is out of pocket by quite a lot. But the flip side is that we have another client whos felel through earlier this year, he is out of pocket nothing.

    He has paid our fee, but as it is not his fault, we will do another application for him free of charge. His valuation fee was a free one. He may have to pay for a valuation fee next time but we will see what is around when he is ready to move.
    I am a Mortgage Adviser
    You should note that this site doesn't check my status as a mortgage adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.
    • mikeyp231987
    • By mikeyp231987 20th Jun 18, 1:01 PM
    • 33 Posts
    • 2 Thanks
    mikeyp231987
    • #6
    • 20th Jun 18, 1:01 PM
    • #6
    • 20th Jun 18, 1:01 PM
    We do not see 30% of cases fall through.
    Maybe 5%.

    But if it falls through, you can be out of pocket anywhere from nothing up to thousands. We had one recently which was particularly bad one and our customer is out of pocket by quite a lot. But the flip side is that we have another client whos felel through earlier this year, he is out of pocket nothing.

    He has paid our fee, but as it is not his fault, we will do another application for him free of charge. His valuation fee was a free one. He may have to pay for a valuation fee next time but we will see what is around when he is ready to move.
    Originally posted by ACG
    Sorry but I don't quite understand your post. Who is 'we' and are you saying that the client that had their sale fall through had insurance and was compensated?

    What insurance would this be then?
    • davidmcn
    • By davidmcn 20th Jun 18, 1:17 PM
    • 8,191 Posts
    • 8,544 Thanks
    davidmcn
    • #7
    • 20th Jun 18, 1:17 PM
    • #7
    • 20th Jun 18, 1:17 PM
    To highlight some of the limitations of the insurance, it appears to cover you if

    a local authority search highlights that the property is subject of a compulsory purchase order
    Originally posted by mikeyp231987
    but not the many other adverse things which may appear in a search

    and also if

    the vendor is not legally entitled to sell you the property
    but not for the countless more likely title problems which may arise.
    • mikeyp231987
    • By mikeyp231987 20th Jun 18, 1:53 PM
    • 33 Posts
    • 2 Thanks
    mikeyp231987
    • #8
    • 20th Jun 18, 1:53 PM
    • #8
    • 20th Jun 18, 1:53 PM
    To highlight some of the limitations of the insurance, it appears to cover you if



    but not the many other adverse things which may appear in a search

    and also if

    but not for the countless more likely title problems which may arise.
    Originally posted by davidmcn
    But are those adverse things enough to make you pull out of the sale? Or could they cause the sale to fall through unavoidably?

    I feel like for 50, if there is even a small chance of the insurance company paying out and saving you from losing out on hundreds of pounds it is worth it.
    Last edited by mikeyp231987; 20-06-2018 at 1:55 PM.
    • davidmcn
    • By davidmcn 20th Jun 18, 2:15 PM
    • 8,191 Posts
    • 8,544 Thanks
    davidmcn
    • #9
    • 20th Jun 18, 2:15 PM
    • #9
    • 20th Jun 18, 2:15 PM
    But are those adverse things enough to make you pull out of the sale? Or could they cause the sale to fall through unavoidably?
    Originally posted by mikeyp231987
    Of course. The sellers might for example be legally entitled to sell the property, but it turns out the property doesn't have any rights of access. You're not covered. And so on.

    I feel like for 50, if there is even a small chance of the insurance company paying out and saving you from losing out on hundreds of pounds it is worth it.
    I would save insurance for the disastrous things which you genuinely couldn't afford, otherwise all you're doing is betting against the insurers. And they usually win.
    • eddddy
    • By eddddy 20th Jun 18, 3:23 PM
    • 6,726 Posts
    • 6,605 Thanks
    eddddy
    Looking at the kind of posts you see on this forum, popular reasons for purchases not progressing include...

    • Seller going too slow and/or not communicating - so buyer gives up
    • Building regs or planning consent issues
    • Chain collapses due to problem higher up or lower down chain.
    • Leasehold related - length of lease, service charges, ground rent.
    • Covenant / Right of Way / Access related
    • Problems identified in survey (but not sufficient to down value by 10%)

    It doesn't sound like any of those would be covered by the insurance.
    • cybervic
    • By cybervic 20th Jun 18, 4:48 PM
    • 409 Posts
    • 534 Thanks
    cybervic
    I have bought home buyer insurance from Homelyfe, only 35 and covers up to total of 2250.
    You need to know what is covered and assess if those situation might happen in your case. Mine is a 2 bed flat in a very well maintained building, I know it's unlikely to have any nasty surprise in survey report, and I am pretty sure I won't change my mind. The insurance is mainly to protect us from being gazumped or when seller simply changes his mind. It depends on how sure are you about the property you are buying really.
    Last edited by cybervic; 22-06-2018 at 5:06 PM.
    • mikeyp231987
    • By mikeyp231987 20th Jun 18, 6:09 PM
    • 33 Posts
    • 2 Thanks
    mikeyp231987
    Hi cybervic

    That's the main reason I'd want to get it too, gazumping. It seems that one is even better value too at only 35.

    The one thing I didn't quite understand in their policy was this part:

    They won't cover costs or expenses:

    "over and above our share of the claim where any claim is covered by another policy or would have been covered by another policy if this policy did not exist"

    What does that mean exactly to you?
    • ACG
    • By ACG 20th Jun 18, 6:58 PM
    • 17,313 Posts
    • 9,177 Thanks
    ACG
    Sorry but I don't quite understand your post. Who is 'we' and are you saying that the client that had their sale fall through had insurance and was compensated?

    What insurance would this be then?
    Originally posted by mikeyp231987
    "We" - I am a Mortgage Broker. Our company does not see 30% of cases fall through.

    Most of our customers are first time buyers, your post is about home buyers insurance. I am saying the 2 most recent times sales have fallen through have resulted in very different "losses", one has lost nothing financially, the other has lost thousands.
    I am a Mortgage Adviser
    You should note that this site doesn't check my status as a mortgage adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.
    • davidmcn
    • By davidmcn 20th Jun 18, 7:53 PM
    • 8,191 Posts
    • 8,544 Thanks
    davidmcn
    They won't cover costs or expenses:

    "over and above our share of the claim where any claim is covered by another policy or would have been covered by another policy if this policy did not exist"

    What does that mean exactly to you?
    Originally posted by mikeyp231987
    If you're insured for the same risk under more than one policy then the insurers all share the loss - you can't just claim under one policy. Pretty standard no matter what type of insurance you're talking about.
    • mikeyp231987
    • By mikeyp231987 21st Jun 18, 3:59 PM
    • 33 Posts
    • 2 Thanks
    mikeyp231987
    I went ahead and bought it so thanks for that link.

    If something went wrong and they dont pay out, I'm not going to lose sleep over such a small amount. I'll be far too busy thinking about the thousands spent on mortgage/survey/solcitor fees that I won't be getting back!
    • Taggie
    • By Taggie 6th Aug 18, 9:35 PM
    • 286 Posts
    • 2,441 Thanks
    Taggie
    Does it cover you if your buyer pulls out then?

Welcome to our new Forum!

Our aim is to save you money quickly and easily. We hope you like it!

Forum Team Contact us

Live Stats

202Posts Today

3,346Users online

Martin's Twitter
  • Ta ta... for now. This August, as I try and do every few yrs, I'm lucky enough to be taking a sabbatical. No work,? https://t.co/Xx4R3eLhFG

  • RT @lethalbrignull: @MartinSLewis I've been sitting here for a good while trying to decide my answer to this, feeling grateful for living i?

  • Early days but currently it's exactly 50 50 in liberality v democracy, with younger people more liberal, older more? https://t.co/YwJr4izuIj

  • Follow Martin