Has anyone heard of residential indemnity insurance?
I think the previous answer is American and therefore not correct for the UK where you posted the question. If you are in the US, then please disregard this answer. Short answer, yes there is such a thing, but it isn’t that simple mate. There’s a fairly common product usually referred to as MIG (Mortgage Indemnity Guarantee) or LMI (Lenders Mortgage Indemnity) and, as you say, what it does is pay out to the lender (bank/Building society) if the borrower (you) defaults and the value of the property is less than the balance of the mortgage. It’s usually used for high ratio lending (say >75-90% of property value). Please note, this type of policy protects the lender it doesn’t protect you. The insurer will come after you for any shortfall. To be honest I’ve never seen it used the way you are describing, but in theory I can see how such a policy might be used to transfer liability as I guess you could pay a premium to indemnify your ex rather than the lender for any shortfall. Note you are
