INDEPENDENT NEWS

New Insurance Product Addresses Risk

Published: Tue 11 Aug 2015 09:28 AM
New Insurance Product Addresses Risk Associated With Residential Property Transactions
Fixes Unknown Problems Up to $100k Cover
Auckland, 11 August 2015 - A new insurance product designed to manage risks associated with residential property transactions has been launched in New Zealand.
Of benefit to property lawyers and their clients, capped conveyancing insurance improves client care, avoids risk, fixes problems when they arise and has the potential to save money and time.
Developed by local broker Mainprice King in association with DUAL Group – the world’s largest specialist underwriting agency – and backed by Lloyd’s of London, capped conveyancing insurance addresses a notable gap in the market.
Jeff Williamson, Chief Executive Mainprice King explains: “This is a brand new kind of policy for New Zealand that is based on residential conveyancing products available in the United Kingdom.
“The policy is designed to cover the cost of fixing any adverse matter related to the purchase of residential property including matters not revealed or identified by searches or enquiries (up to $100,000 per policy) including such things as:
• Non-compliance with registered covenants/encumbrances, including fraud
• Lack of building consent or unauthorised additions
• Boundary disputes
• Seller misrepresentation
• Unknown rights over the property
“The intent of capped conveyancing insurance is to cover as many of these problems as possible. The main advantage is if a problem arises post-settlement, it gets fixed. The conveyancing insurer focuses on fixing the problem. There’s no need to prove fault, and clients can get on with fixing the problem rather than arguing about who is to blame.”
Capped conveyancing insurance has been successfully trialled in New Zealand over the past eight months, receiving excellent client feedback.
In Auckland, the council has sent a clear message that unconsented additions are an important issue for home buyers, says Williamson.
“Buyers will have to bring unconsented works up to current NZ Building Code standard, or may even have to remove them. Obviously there will be cost involved in any type of remedy of unconsented work.
“Conveyancing insurance cover can reduce the anxiety and risk associated with buying residential property. This is something that is new, so ask your lawyer about it.”
Advantages for residential property purchasers:
• First party cover – the matter just gets fixed
• No need to prove fault
• Capped policy covers up to $100,000, but can increase cover to the full purchase price with an uncapped policy
• A one-time payment - covered for the period the property is owned
• Vendors or purchasers can elect to cover specific risks – this cover passes on to all owners of the land in perpetuity.
Advantages for lawyers:
• Better quality client offering
• Competitive advantage
• Improved risk management - de-risks a substantial portion of fee base
• If covering 100% of residential conveyancing transactions a low flat fee per policy applies, otherwise can cover specific transactions
• No excess payable
• Can lead to reduced professional indemnity (PI) claims and reduced PI premiums
• No come back on lawyer when an innocent mistake has been made
• Preferential rates for members of Auckland District Law Society Inc
For more information contact Mainprice King or visit www.adls.org.nz
Ends

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