Is Household insurance mandatory with a mortgage

billyhead

I let my insurance lapse and am going to renew it next week. I still have an outstanding mortgage but was wondering is Household insurance a legal requirement in Ireland when still repaying a mortgage?

To Elland Back

It's not a legal requirement, it is a contractural agreement that you entered in to. Your mortgage providers are joint owners of your home and they want to ensure funds are available if anything happens to it

Fred Swanson

This post has been deleted.

phormium

I don't think banks do that anymore, will probably write you a few letters but it's in your own interest too to have the house insured. If it burned down you'd still owe the money.

coylemj

What's supposed to happen is that you tell the insurance company to note the lender's interests on the policy. That's to stop you doing a runner with the money if the house burns down - the lender gets first call on a cash payout. And if you let the policy lapse, in theory that insurance company should inform the lender but in lots of instances it doesn't seem to happen.

billyhead

Thanks for the reply folks. Is Mortgage protection insurance mandatory then?

Fred Swanson

This post has been deleted.

To Elland Back

billyhead wrote: »

Thanks for the reply folks. Is Mortgage protection insurance mandatory then?

As I advised earlier on the house insurance issue, You agreed to this too along with other terms and conditions as part of your mortgage. If you cancel it, you've broken the terms of your contract. I don't know what the consequences of that would be

Bruthal

To Elland Back wrote: »

Your mortgage providers are joint owners of your home and they want to ensure funds are available if anything happens to it

The buyer is the owner legally, the bank just has a lien on it.

phormium

Mortgage protection insurance is mandatory under the Consumer Credit Act, there are a few exceptions but they are exceptions and not the norm, most people will have to have it.

Fred Swanson

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seamus

Basically a bank cannot let you draw down on a mortgage without confirmation of cover being in place. If you cancel your life assurance or your home insurance a month later, there's realistically very little they can do about it.

Trish56

billyhead wrote: »

Thanks for the reply folks. Is Mortgage protection insurance mandatory then?

It was a condition of your mortgage offer that you provide both Home Insurance and a mortgage protection policy in order to draw down the mortgage. Have you considered what would happen if your house burned down in the morning and you had no home insurance - you will have to continue to pay the mortgage until the end of the term and also provide alternative living accommodation for your family. If you're married with a family and you died suddenly and left your mortgage protection policy lapse, then your wife would have to try and repay the mortgage or lose the family home.
If you're finding it a struggle to pay the premiums, then shop around and see if you can get a cheaper premium. Mortgage protection rates have significantly reduced over the last number of years. Also you may have been a smoker at the time and since given them up this will also reduce your premium.

Carawaystick

billyhead wrote: »

Thanks for the reply folks. Is Mortgage protection insurance mandatory then?

It is unless you can't get it, then it isn't



Well life cover, which will pay off the loan is needed, the insurance companies will try scare you into buying extra cover over an above the minimum.