First Title Launches Home Owners' Protection Policy
1 September 2010
LONDON, September 1, 2010 - First Title Insurance plc (First Title) has launched the Home Owners' Protection Policy (HOPP) to provide solicitors with an effective tool to de-risk the process of house buying for their clients and mortgage-lenders.
The new policy helps to safeguard home buyers and their lenders against potentially crippling financial loss from any one of a number of major risks associated with buying, mortgaging or using a residential property. Risks covered by the HOPP include those that even the most diligent solicitor cannot guard against such as fraud, seller misrepresentation, boundary disputes and lack of planning permissions and building regulation consents.
The 'no fault' nature of the policy means that claims can be made without clients having to prove negligence at their own expense. In this way, the HOPP offers clients greater protection than their solicitor's Professional Indemnity Insurance (PII).
By shifting the burden of risk from PII to the HOPP, this new policy has the potential to contribute significantly to the long-term stabilisation of the conveyancing market and PII premiums, which are currently running at record levels in the UK. According to leading insurance broker, Aon Corporation, premium rates seem to be increasing by around 20% with some firms experiencing increases of 100%. PII premiums have been driven up by a combination of the growth in numbers of claims, which rose by 163% in 2009; and a doubling of the number of firms being placed in the assigned risk pool last year.
A product similar to the HOPP was introduced in Canada in 1995 when PII premiums reached unsustainable levels there too. As a result, base premiums for PII had halved by 2001; and they have remained at this level ever since.
"The current status quo is untenable," said Phillip Oldcorn, Director, of First Title Insurance plc. "Conveyancers and their clients are at risk. What we're doing is launching a policy that can help address the systemic problems in the conveyancing market. But the HOPP is much more than a straightforward insurance policy; it's solving big problems for anyone involved in buying and owning a home. The breadth of risks it covers is unheard of in the UK, giving consumers and lenders a much greater degree of security. For the legal profession, the HOPP will help to protect a key practice area that for many is critical to their business survival."
First Title has developed the HOPP in conjunction with Aon Corporation. Commenting on the launch of the new product, Chris Childs, Director at Aon said: "Aon has been working with the legal sector for over 30 years. We're pleased to have helped develop the HOPP. We believe it will bring some much needed stability to the PII market in the future."
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