whose name on buildings insurance policy??

dkny_2

Basically as my sig says below am purchasing, and have been told that building insurance needs to be in place on exchange - no problems this has been sorted, BUT i have been told today to "ensure building insurance is in the lenders name"

I have never heard of this before is this correct??

Thanks in advance

silvercar

standard practice. most insurers will ask you the name on your lender and include it as a matter of course. if not, just ask them to note the mortgage companies interest.

dkny_2

silvercar,
Thanks,
So can i basically just have my name on it, or do i have to have them on the policy only.. sorry its just ive never heard of this before ...

Thanks

courtjester

I think you have to have the policy name listed as:

Mr & Mrs DKNY and XYZ Building Society as mortgagees

As a result, any payment made under the building policy will probably go to the mortgage lender first which will complicate /delay insurance payments for repairwork as you will need to get them to release funds to you as repairs progress.

For example, imagine large fire making your home uninhabitable - you will need interim payments to pay for hotel bills and for works as the repair proceeds to pay contractors, possibly over many weeks or months. For each cheque from the insurance company, you woul dneed to wait for this to come via the lender who will doubtless want to approve release of the funds (in addition to the insurance company's approval.

For practicality, it is better NOT to have the lenders name on your policy, but it is a usual requirement for you to provide evidence of insurance with an approved insurers on property they have a secured claim on. If you can get away with not naming them on the policy, it's easier for you.

Who is making this requirement?

silvercar

sorry courtjester, it doesn't happen that way. The mortgage company is just getting their interest registered with the insurer. Any claim on the policy is handled directly between you and the lender. I've always had to register the mortgage compnay's interest and never had a problem with claims.

The mortgage company likes their interest registered so that if you cancel insurance they are told and they can remind you that you need to keep building insurance cover.

dkny_2

courtjester wrote:

I think you have to have the policy name listed as:

Mr & Mrs DKNY and XYZ Building Society as mortgagees

As a result, any payment made under the building policy will probably go to the mortgage lender first which will complicate /delay insurance payments for repairwork as you will need to get them to release funds to you as repairs progress.

For example, imagine large fire making your home uninhabitable - you will need interim payments to pay for hotel bills and for works as the repair proceeds to pay contractors, possibly over many weeks or months. For each cheque from the insurance company, you woul dneed to wait for this to come via the lender who will doubtless want to approve release of the funds (in addition to the insurance company's approval.



For practicality, it is better NOT to have the lenders name on your policy, but it is a usual requirement for you to provide evidence of insurance with an approved insurers on property they have a secured claim on. If you can get away with not naming them on the policy, it's easier for you.

Who is making this requirement?

Sounds clearer Thanks,
I would prefer NOT to name them on the policy just so its easier for me..my mortgage broker informed me (c&g) sayin platform (lender) are requesting this. Am thinkin of phonin them tomm morning to get this confirmed... I hope i dont have too but if i have no choice then i will have too...

dkny_2

silvercar wrote:

sorry courtjester, it doesn't happen that way. The mortgage company is just getting their interest registered with the insurer. Any claim on the policy is handled directly between you and the lender. I've always had to register the mortgage compnay's interest and never had a problem with claims.

The mortgage company likes their interest registered so that if you cancel insurance they are told and they can remind you that you need to keep building insurance cover.

Thanks,
Makes me feel better, so u didnt have any probs, was worried that it was gonna cause problems as i have never done this before, Best if i call them to double check, Im not gonna lose my new house over this lol, it means way to much LOL... thanks guys

courtjester

silvercar wrote:

sorry courtjester, it doesn't happen that way. The mortgage company is just getting their interest registered with the insurer. Any claim on the policy is handled directly between you and the lender. I've always had to register the mortgage compnay's interest and never had a problem with claims.

The mortgage company likes their interest registered so that if you cancel insurance they are told and they can remind you that you need to keep building insurance cover.

Silvercar - not entirely clear what you are saying here - it doesn't happen what way? "The mortgage company is just getting their interest registered with the insurer..."??? The poster started off by saying that he/she was told to get the building insurance IN THE NAME of the lender (rather than in his/her own name), which is a bit different from only the lenders *interest* being registered somewhere.

If the policy is in the name of the lender or they are named as a joint policyholder, then the property owner will need the lender's release on any claims cheque before money comes to them. It really depends on how the insurance is set up and whether we are talking about the insurance being provided primarily by the lender (for example if the policy is the lender's own branded insurance product).