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Evidence in action

Protecting UK lending institutions since 2003

While Lenders Plus is new to Australia, it's been successfully protecting UK lending insitutions ince its launch in 2003. 

The following are actual claims examples from the UK

  • This is why amounts are in UK pounds

Residential Assets

Example 1  |  Section B  |  Outstanding Balance £226,481

The Lender submitted a claim following a fire incident arising at a repossessed home. 

A borrower had suffered fire damage to his property - the damage was a total loss. The borrower had been in arrears with the client however they did maintain insurance cover. Following the fire this was reported to their insurers who after investigations found the borrower had previously been declared bankrupt and therefore his policy was void. 

The borrower advised our client who in turn took possession of the site as the borrower could no longer make payments. 


The Lender submitted a claim against their lenders policy. This site was assessed and a total loss was confirmed. 


The claim was progressing the site was being valued to determine the loss to the client. During this time the client had been approached with an offer to purchase the land. It was agreed at £180,000 and therefore the claim settled £46,481 less policy excess. 

Lenders Interest Insurance

Example 2  |  Section B  |  Outstanding Balance £317,047.21

The Lender submitted a claim following a fire incident arising within a repossessed former hotel - drinking establishment not accommodation.

The property had been purchased in 2005 by the Borrower for £325,000.00. It then transpired that although the Borrower initially met their loan repayments around the spring and summer of 2011, their repayments stopped. Upon enquiry from the Insured's investigators it was ascertained that there had been a significant fire within the premises on 13 November 2010 resulting in the Public House no longer trading. It was initially assumed that the claim was being considered by the borrowers insurer, but the claim was declined. 

It is our understanding that following full investigation, Insurers and their Loss Adjusters suspected that there had been self-ignition due to deteriorating trading conditions but this was not proven. Instead the claim was declined due to various breaches of Policy Condition, Warranty and Endorsement and evident mis-representation and non-disclosure. 

Upon discover of the fire, the premises was immediately repossessed by our client and prepared for sale. At the time of repossession, the total of arrears owed was a sum of £317,047.21. 

In this respect it was ascertained that despite the original purchase value of the property being almost £400,000.00 prior to the fire, the value of this Public House in its waterside location had reduced to a sum of £140,000.00. 

The pre-loss and post-loss values were in our opinion accurately stated and, therefore, the diminution in the market value of the property as a result of the fire was a sum of £115,000.00 from which the £5,000 policy excess was deductible. The claim was accordingly agreed in the net sum of £110,000.00. 

Lenders Interest Insurance 

Example 3  |  Section C  |  Outstanding Balance £489,202

The Lender submitted a claim following a fire incident arising within a repossessed former hotel - drinking establishment not accommodation.

Our client submitted a claim following discovery of theft and substantial water damage within a repossessed property. The premises comprised a four storey, including cellar, purpose built office block dating from circa 1890 covering 830 square metres The property was located within a secondary commercial and retail district of central Stoke being on the edge of the original retail shopping district which has faded in importance due to developments in different parts of the City Centre and out of the City. 

At the time of repossession the Borrower owed arrears totalling £489,22 to our client. Initial assessments were made as to the pre-loss and post-loss value of the property and it was feared that the diminution in market value arising from the theft and water damage was a sum of £175,000. We hold on file a Surveyor's assessment that the pre-loss market value for the property in good order would be £325,000 and the assumed post-loss value was £150,000. These figures were not immediately accepted by all interested parties to include ourselves. 


Quotation had been sourced for proceeding with the physical damage repairs. Assessors presented a quotation totalling £107,998.80 for reinstating  the damage throughout the property which incorporated areas of dilapidations. An initial estimate provided by the General Maintenance Company totalled £112,425.00. The dilapidation costs incorporated within both quotations, together with costs of lifting and replacing the carpets were not covered under the Buildings policy. However, the assumed cost of reinstating the covered physical damage was considered to be a sum between £90,000.00 and £95,000.00.  

It was agreed that further assessment would be undertaken to the diminution in market value of the property. Thsi enquiry was completed by X Commercial Property Surveyor and it was agreed that the pre-loss value of the premises would not be greater than £175,000. It was initially ndicated that the value after the damage was caused would be a reduced sum of £115,000.00. We were however, pleased to note that the property was actually sold by the Insured for a sum of £125,000.00.

On this basis, the diminution of market value arising from this incident was agreed to total £50,000.00, from which a £5,000 policy excess was deducted. 

The claim was agreed in the overall sum of £45,000.00.

Lenders Interest Insurance 

Example 4  |  Section C  |  Outstanding Balance £1.95m

The Lender submitted a claim following a fire incident arising within a repossessed former hotel - drinking establishment not accommodation.

our client submitted a claim following a substantial fire at a repossessed property. The premises had been repossessed from the Borrower, who had utilised this original textile mill for the manufacturing of beds and associated furniture. 

The borrower had purchased the freehold of the site at a cost of £3.5m having received a commercial mortgage loan of £1.95m. 

The business was failing and during the Spring and early Summer of 2014 the Loans Manager was in the process of arranging to repossess the site when this procedure was accelerated following a significant malicious damage/theft incident which had arisen in July. 

The site was repossessed in August by the borrower had various fixtures and fittings, plant equipment, etc still contained within the factory buildings. 

Our client confirmed that he was contacted by the borrower be informed that he in turn had been called by Policy to be advised that a substantial fir had arisen overnight. It appeared that unknown intruders had forced entry on to site, had endeavoured to steal surviving valuable materials, to include wiring, equipment, and the like but had set fire to Unit 1, Unit 2, and Unit 4 being three of the five single storey buildings. There were multiple seats of fire. Combustible materials had been placed at strategic points and petrol was  used as an accelerant to set fire to the buildings causing substantial damage throughout the premises. 


The representatives of our client were immediately concnered that there was evidence that the borrower was being targeted and the Policy confirmed their own suspcisions that he was the victim of a vendetta, possibly due to financial debts. On this basis our client immediaely moved to sell the premises. 


Following our investigations in relation to the earlier malicious damage/theft incident it was established that no primary insurance cover had been arranged by the borrower nor any other party. The property had been repossessed at the time this incident and we are therefore satisfied that the claim should be considered under this policy. 

The premises were ultimately sold for £1.1m and it was apparent that the diminution in market avlue sustained by our client was at least £1.5m. This diminution in maket value reflected the loss sustatined both as a result of the fire event but also the earlier malicious damage/thet incident. 

A claim was submitted and settled against our policy. 

Want to know more?
Call Paul Benjamin, Managing Director of Benjamin & Benjamin
on 1800 236 526
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