£25 fee to not go with A&L's recommended insurance

moonwolf_3

hi we have just recieved,our a&l mortgage offer and it seems we have to pay £25 for the priveledge of finding our own insurance rather than go with their choice zurich.
however i rang zurich and they wont insure the property as its near water way and has a flood risk!
so ive had to find different insurance. surely we shouldnt have to pay £25 if we cant use their insurance recommendation??

dunstonh

The £25 fee is to pay for them to inspect your insurance policy you take out.

lisyloo

Yes you do have to pay.
They are taking risks by securing a loan on your property.
They are entitled to charge a fee to make sure you are adequately insured.

If you don't like the way they run their business then you are free to choose another mortageg but there is certainly nothing illegal about it.

moonwolf_3

The £25 fee is to pay for them to inspect your insurance policy you take out.

that makes sense.-thanks

dunstonh

i will just add, that the reason for the fee sounds reasonable and historically all lenders used to check the policies and make sure they were jointly listed on the policy and it was on an approved list of insurers. Hence they the charge existed.

Nowadays, most lenders have dumped the charge but a few still levy it. Whether they do the work for it though is something they can only say

dacouch

Its more a case of the vast majority of customers used to Insure with their mortgage company as the mortgage companies used to lead "insist" their cover was required to get the mortgage. The government (Rightly) decided this practice was unfair on the customer and that customers should not be leaned on to take the mortgage companies expensive home insurance. The government allowed them to make a £25 charge to inspect the policy as the other posters have pointed out.

Most mortgage companies do not make the charge.

You can sometimes get the charge waived by ringing the mortgage company up and speaking to a superviser, it may be worth doing this in your case as their preferred supplier cannot offer you cover.

A lot of companies will pay this charge for you, have you asked the companies you are getting quotes from if they will pay this charge?

Bear in mind the £25 charge is often levied each time you change home insurers.

Woby_Tide

We had the same issue as we are close to a river. I rang up A&L and explained why I couldn't take their insurance and they said in these cases they waive the charges which they did. They haven't requested to see any documents just asked who the policy was with. I've also added A&L onto the policy as names aswell

moonwolf_3

woby_tide.. thats exactly what happened , we rang them yesterday and they have waivered the £25. unfortunately they are having to redo the mortgage offer dos to reflect that.

why they couldnt send a cheque for £25 and keep the offer docs the same i dont know.. would be too easy!

just got to hope that they do it in time because we are supposed to be exchanging today!

cogito

You might actually find that an alternative insurer would pay the fee for you. Some do.