A brand new insurance product, conveyancing insurance, has been released in New Zealand to reduce the risks related to residential property transactions.
This will be of benefit to NZ property lawyers as it improves client care and tackles a range of issues commonly encountered when purchasing new property.
Local broker Mainprice King in association with underwriting agency, DUAL Group, developed this new product with backing by Lloyd’s of London to fill a sizeable gap in the property market.
Chief executive of Mainprice King, Jeff Williamson, explained the product. “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.”
Capped policies will cover up to $100,000 per policy. An uncapped policy is also available. Issues covered by this insurance include:
- 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,” Williamson said. “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.”
Conveyancing insurance offers several advantages to local property lawyers looking to enhance their client offerings. As well as a competitive advantage over other legal firms, lawyers can also offer their clients improved risk management with a substantial portion of the fee base now free from risk. This, in turn, can lead to reduced professional indemnity claims and premiums.