Tied in to Lender's Isurance?

Sensible_Jess

Hi
After following a thread on the House Buying board regarding home insurance for leasehold properties (see link below), I wonder if anyone has any advice for me?

Basically, I bought my house earlier on this year (freehold) and my Mortgage lender states in the very small print that I have to get their approval to insure my house with anyone but their insurers.
I was unaware of this until we were exchanging contracts (the 'helpful' mortgage advisor had not mentioned this part despite several visits over six months to discuss things in detail). It was my solicitor who pointed it out.

Not wanting to hold anything up at that point and having quite enough to deal with at the time, I duly took insurance through them. However, it will come up for renewal soon, and I want to be able to shop around for the best quote (in true MSE style).
How would I go about 'getting their permission' to change insurers?. Can they withold permission and will it make my insurance invalid if I go ahead and take out a policy with someone else anyway? (a reputable company of course....)

Here's the thread on Leaseholds...

tbs624 wrote: »

Bestford/Bovvered - have a look here on the insurance issue. They are trying it on.

Thanks
S_J

huckster

With some properties, particularly flats, they are insured on a block basis, with you paying your share of the premium. If this is the case you can't really arrange your own cover, but you can of course with other property owners ask the person who looks after the Insurance to shop around.

If this is not the case of having a block policy and you have a house which is standalone, then you can arrange your own cover. You just need to ask your mortgage lender for the process by which you can change Insurers. They may just provide you with a list of Insured perils that need to be covered, policy features that they require and ask for a copy of the policy to be provided. Some lenders do make a charge for vetting new Insurances, which can be up to £25 I believe. The Building sum Insured must be adequate to cover the rebuilding cost, so if you don't know this, go a for a policy offering cover up to £1 milllion or unlimited cover.

The OFT dealt with this issue about 15 years or so ago. The stopped lenders making it a condition for their customers to have their Buildings Insurance, but allowed them to charge an admin fee of up to £25 (or is it £35 ?) to check alternative cover. So you need to ask your lender for their process.

G_M

Shop around, find your prefered insurer, comparing price AND cover provided, then call your insurer.

In 99% of cases they'll accept. They'll want their name included on the policy and they;ll want a copy of the insurance certificate. Some lenders will charge an admin fee for changing their records (£15? £25?) so check this first.