mortgage and home insurance

davilown

having just exchanged, i set about getting building and contents insurance. I went through sainsburys ( good cash back and a £30 voucher) making it about £120 total. Buildings cover is for the total rebuild cost and contents for £39k.

Now the mortgage company wanted it insured for £190k and the solicitor wants documentation with the mortgage providers details on.

I didn't have to input any of this to get the insurance. Would I be better off phoning sainsburys tomorrow and asking them to add these details on or will this acceptable to the solicitor to release the money?

Thanks in advance

dimbo61

Well first of all its normal for the mortgage company to have an interest on the buildings insurance and be named on the policy.
Its now saturday so best to ring up before 12 !
Alot of insurance policies give unlimited rebuilding costs so make sure your covered for at least £190K
Give Sainsburys a call.

opinions4u

The lender has a risk if the property is damaged, therefore they can insist that you insure to their required standards.

I am amazed that you have exchanged contracts before putting cover in place. If the place burns down you are still legally committed to buy. Get the right cover in place and fast.

donkey1969

I'm amazed your solicitor exchanged without actually having a copy of the policy before them

kingstreet

Ring the insurer and ask them to insure the building from exchange of contracts and contents from completion (let them know the completion date).

Tell them to note the interest of the (name of the) lender and your mortgage account number.

davilown

donkey1969 wrote: »

I'm amazed your solicitor exchanged without actually having a copy of the policy before them

Why? its a requirement for the mortgage, not exchange surely?

davilown

kingstreet wrote: »

Ring the insurer and ask them to insure the building from exchange of contracts and contents from completion (let them know the completion date).

Tell them to note the interest of the (name of the) lender and your mortgage account number.

Thanks, did that earlier, they added the relevant details and faxed the details to the solitors at the same time! Still not quite convinced on the insured amount though

DVardysShadow

davilown wrote: »

Why? its a requirement for the mortgage, not exchange surely?

The mortgage lender can only enforce the requirement as a condition of the mortgage. It is best to get it put in place conditional upon exchange, so that you don't get caught out by 1 of 2 scenarios

1. The insurer refuses to insure, so the lender refuses to lend, but you have signed the contract and you are forced to buy
2. You exchange contracts, the place burns down, the seller is not insured and neither are you, but you are forced to buy.

Thrugelmir

davilown wrote: »

Why? its a requirement for the mortgage, not exchange surely?

On exchange you are legally committed to purchase the property.

The lender can still retract the mortgage offer prior to exchange.

So as DVS says, you would be between a rock and a hard place if the property was damaged in some way.