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Bank took portion of insurance claim cheque.

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  • 23-06-2011 9:13pm
    #1
    safetymanager
    Registered Users Posts: 74 ✭✭


    Had an insurance claim which was finally paid after 6 months last week. Went to lodge the cheque but it was made out to us and our mortgage provider as the insurance policy is assigned to them. Had to send the cheque to the mortgage provider who in turn took our mortgage payment for this month (June) and a few hundred euro (not even one full payment) and sent us the balance. Is this legal? Surely the money is ours to decide what to do with it, after all we have to repair major damage to our home. Rang the Building Society and the guy said if we want the money we have to send them invoices for the entire cost of the repairs and if that is more than the claim sum paid then they will pay the builder directly and we can pay the arrears and the June payment ourselves. What kind of nonsense is this?


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    #2
    oldyouth
    Closed Accounts Posts: 4,754 ✭✭✭oldyouth


    Mortgage providers usually have themselves noted as an Interested Party on an insurance policy that covers the property. By having the interest noted, your insurer gives an undertaking to the mortgage provider that any claim cheques (usually in excess of €1,300) be made out in joint names.

    The purpose of this is to allow the mortgage provider ensure that the funds are used to reinstate the damaged property, in which they have a financial interest, to what it was before. So no, by agreeing to this condition as part of your mortgage, the money is not yours to decide what to do with it. It has to be used to reinstate the house.

    The 2nd part of your post has be a bit confused. I don't think they should be using it against mortgage repayments, but I'm no expert in that area. Perhaps someone else can advise there.


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    #3
    amdublin
    Registered Users Posts: 20,653 ✭✭✭✭amdublin


    The policy is assigned to them. They therefore own the plan and the proceeds. Could have kept it all if they wanted.


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    #4
    oldyouth
    Closed Accounts Posts: 4,754 ✭✭✭oldyouth


    amdublin wrote: »
    The policy is assigned to them. They therefore own the plan and the proceeds. Could have kept it all if they wanted.
    The house insurance policy is not assigned to them. They have an interest in it.


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    #5
    amdublin
    Registered Users Posts: 20,653 ✭✭✭✭amdublin


    safetymanager wrote: »
    Went to lodge the cheque but it was made out to us and our mortgage provider as the insurance policy is assigned to them.

    The op specifically said it was assigned to them.


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    #6
    oldyouth
    Closed Accounts Posts: 4,754 ✭✭✭oldyouth


    amdublin wrote: »
    The op specifically said it was assigned to them.
    Can't be done, the most they can have is an interest.


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    #7
    amdublin
    Registered Users Posts: 20,653 ✭✭✭✭amdublin


    oldyouth wrote: »
    Can't be done, the most they can have is an interest.

    We'll have to agree to disagree.

    IMO it can be assigned.
    The op specifically said it was assigned.

    Why do you think it cannot be assigned :confused:


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    #8
    oldyouth
    Closed Accounts Posts: 4,754 ✭✭✭oldyouth


    Because it it a contract between the insurer and the policyholder. The policyholder can agree to have claim cheques for damage to the buildings made in joint names (not the mortgage provider only). In addition, the mortgage provider can have no rights or interest on other sections of the policy such as contents, all risks, money, householders liability etc. If a policy was assigned to them, it would conflict with this.

    It is easy to misunderstand the wordings regarding this situation


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