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House insurance for a mortgage

  • 18-05-2016 11:25am
    #1
    pasquale83
    Registered Users Posts: 477 ✭✭


    Hello Folks,

    I have a mortgage on a house I bought last year and the house insurance is expiring in a week or so.

    I am going to renew it, but I am wondering: is it needed for the mortgage by contract? I mean, in case I don't renew it, I am going to have problems with the landing bank?

    Thank you!


Comments

  • #2
    Atlantic Dawn
    Registered Users, Registered Users 2 Posts: 83,051 ✭✭✭✭Atlantic Dawn
    M


    No you won't have a problem, however if the house burned to the ground you would be personally liable for the full amount owing to the bank. Seperately you would have life cover in place as part of terms of mortgage where if you died the bank would be given the amount outstanding on the mortgage.


  • #3
    pasquale83
    Registered Users Posts: 477 ✭✭pasquale83


    Atlantic Dawn wrote: »
    No you won't have a problem, however if the house burned to the ground you would be personally liable for the full amount owing to the bank. Seperately you would have life cover in place as part of terms of mortgage where if you died the bank would be given the amount outstanding on the mortgage.
    So in case of no house cover and house burned I have keep paying the mortgage even if the house is gone, correct?


  • #4
    Henry Ford III
    Moderators, Business & Finance Moderators Posts: 17,725 Mod ✭✭✭✭Henry Ford III


    pasquale83 wrote: »
    So in case of no house cover and house burned I have keep paying the mortgage even if the house is gone, correct?

    Yes. Your debt won't be covered and won't go up in flames like your house.


  • #5
    To Elland Back
    Closed Accounts Posts: 1,923 ✭✭✭To Elland Back


    It is required by contract. One of the conditions of your mortgage will be that you maintain at least fire cover on it. If you have a current policy, it is likely that they are currently noted as an Interested Party. If you lapse the policy, the insurer is obliged to notify the lender, who will then contact you about the matter


  • #6
    PaulM1977
    Banned (with Prison Access) Posts: 210 ✭✭PaulM1977


    Check you mortgage loan offer, which states you have to have buildings insurance for the duration that you have a mortgage on your property. If you don't then you are breaching the terms of the mortgage.
    Add to that, why wouldn't you cover your home, in the event it ever burnt down, fell down or need repairs done to it due to subsidence or flooding? Can you pay for the rebuild costs out of your own pocket?


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  • #7
    ted1
    Registered Users, Registered Users 2 Posts: 23,589 ✭✭✭✭ted1


    pasquale83 wrote: »
    So in case of no house cover and house burned I have keep paying the mortgage even if the house is gone, correct?

    Yeah, that's kind of obvious.


  • #8
    pasquale83
    Registered Users Posts: 477 ✭✭pasquale83


    Thank you for all your replies!


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