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Double indemnity |
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Double indemnityA term normally associated with accident insurance. Under certain conditions, for example a road accident, a policy will pay twice the normal sum to the insured.Similar MatchesIndemnityIndemnityAn agreement in which one person is answerable for compensating the losses of another. Indemnities are common features of many commercial contracts where one party is buying goods or a service off another, and wants to be sure that if it will be compensated if the seller has misled it about something.For example, a company that buys a plot of land might require the seller to confirm in the contract that it knows of no environmental liability relating to the land, and will also require an indemnity clause in the contact obliging the seller to make good any losses if it turns out that the land does have some environmental liability.Of course, an indemnity in a contact is only worth something is the person or company giving it has the money to make good the losses. MIG Mortgage Indemnity GuaranteeMIG Mortgage Indemnity GuaranteeThis is insurance for the lender paid by the consumer in a one-off payment, on 'high' LTV mortgages. This protects the lender in the event that you default on the loan and the sale of the property is not enough to repay the amount that they are owed. Some lenders will insist you pay this if your mortgage is for as low as 75% of the value of the property, but 90% is a more common level. Some lenders will not insist on it regardless of the loan value. You can often add this fee to the loan, but be aware that you will then be paying interest on it until the loan is repaid in full. Indemnity insuranceIndemnity insuranceA policy which covers the insured against the loss of an asset. The purpose of the insurance is to place the insured in exactly the same financial state after a loss as he was in before the loss occurred. IndemnityIndemnityApplies to insurance policies and means the insurer will basically make sure you are no better or worse off in the event of a claim, taking into account wear and tear. Mortgage indemnityMortgage indemnityA mortgage indemnity allows a mortgage lender to recover the costs incurred from a repossession by pursuing the former owner for the difference between a) what the property was sold for and b) what the former owner still owes under the mortgage.In effect, if you are unable to pay your mortgage, and your property is repossessed and sold, the lender can still chase you for a shortfall if the amount raised by the sale doesn't cover your debt.Some mortgage companies have insisted that borrowers take out an insurance policy to cover the potential liability - know as a mortgage indemnity guarantee. MIGs are most common where the deposit being put down by the mortgagor is less than 10% of the borrowed amount. Typically a MIG will add £1,600 to the cost of a £100,000 mortgage.MIGs have come in for a lot of bad publicity, and are not as common now as they used to be. Some lenders have abandoned them altogether. Further SuggestionsIndemnity Guarantee PremiumBond of Indemnity indemnity commission |
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