Applying for mortgage - is insurance reallly needed?

dunstonh

Yorkie1 wrote: »

I don't know, but I think you just did! :rotfl:

And its exactly what we are all thinking

haras_nosirrah

I am afraid if this is your attitude to protecting your most valuable asset you may be better going into rented rather than buying. As someone's signature on here says - a house is not an ipod.

With regards to insurance - you are ensuring that should the worst happen you are protected. A lot of people seem to think that if they never have to claim on their insurance than it has been a waste of money. Myself and my partner pay £15 a month life insurance. If I get to the end of the insurance and haven't claimed on it then I will be very very happy. Yes we would have paid - £4,500 in premiums and got nothing back but we will both still be alive. I see that as a good thing and sticking that £15 a month away under self insuring wouldn't build up the £150,000 we are insured for. Sometimes it is worth paying the insurance for something really important. Buildings and life insurance are two such examples.

themull1

And yet you've never mentioned how much the mortgage lender takes in interest.....

Senior_Paper_Monitor

Lenders' interest in the subject varies - and frankly, particularly at remortgage rather than purchase, the solicitors demand for proof tends to be a little slacker. Mid term there is rarely any check unless there is a cause for suspicion. None of that is a reason to change a comment, as many have made, that deliberately lapsing inurance cover would be the action of a certifiable fool.

The last fact is probably the reason that lenders/insurers have not spent large sums of money developing systems to maintain a check in real time - i.e they are 'self insuring' against a minimal risk that they can afford to cover from available funds at any time (not that it will prevent them chasing the homeowner[ex] through the gates of hell - or wherever the insane go - for recompense).

Doshwaster

QQQ wrote: »

3. I am sure more than half (if not 90%) of insurance premium goes into income of those who write small print and those selling me the 'insurance product'. So, is not it better to do self-insurance paying a little amount into savings account every month?

In many cases I'm a big fan of self-insurance (esp for extended warranties and unemployment protection) but when it comes to building insurance I don't think you can do it youself, unless you are able to put away a six figure amount.