General insurance network, CETA, has introduced a new legal expenses product for those buying a home ‘ a first for the UK.
The Home Buyers Protection Policy will give home-buyers comeback against a range of professional advisers, should they be negligent.
The aim of the product is to insure against problems from most of the people involved in the home-buying process. Claims may be made not only on the solicitor or licensed conveyancer acting for the buyer, but also the mortgage lender, the surveyor acting for the purchaser or lender, builders that issue warranties and even the public utilities and the removal firm. The policy also provides cover for legal proceedings against vendors to obtain vacant possession in the event of continued occupation by the vendor.
The policy, which must be taken out before exchange of contracts, covers the purchase of main residences in the UK. It lasts for 12 months and allows claims for damages up to £25,000 if the property buying process goes awry. There is a policy excess of £100, and claims must be valued at over £500.
Commenting on the new product, David Quick, CETA’s managing director, said: ‘We believe there is a gap in the market for this sort of product. The Home Buyers Policy has been designed to ensure that purchasers can be properly protected at a very competitive rate from the moment they are legally obliged to buy a property.’
The product has been designed to be sold through CETA members, mainly IFAs and mortgage brokers, and costs a one-off premium of £30, plus insurance premium tax.
CETA believes the new policy, which pays a commission of 15%, will enable advisers to offer a more complete service and gain competitive advantage over other intermediaries. Quick said: ‘It’s an inexpensive product, which can be sold alongside other mortgage related insurance. The policy is addressing a real need and the initial feedback we have received from our members is that it is going to be very popular.’