Buildings Insurance for Mortgage

UrWntr

Hi All,

We're almost ready to exchange contracts but we need to sort out Buildings Insurance as a prerequisite.

It states the following on my offer of loan:

"The property must be insured at your expense for its full reinstatement value. We must either be named on your buildings insurance policy as a joint insured party or our interest as mortgagee must be noted on the policy. Your insurance must be for a minimum reinstatement value of £120,000.00 and the policy must be index-linked".

A couple of questions:

1. I've looked at various sites and comparison sites and there is never the option to list a third party organisation on the policy. It's possible to add a second person, but not a company. What's standard practise here?

2. How do I ensure that the policy is index-linked?

3. Should the policy start date be when contracts are exchanged or the completion date?

Thanks,
-UrWntr

ACG

Just do it in yours or your partners name - the money would get paid to you. You can then use the money to clear your mortgage.

You dont need to. Most companies insure your house for a rediculous sum of money (anywhere between £500k and £1 million is failry common). So unless your house is valued over that or close to then dont worry.

Im pretty sure its from exchange of contracts, as thats the date you are liable for any pull out (so if the house were to fall down between exchanging and completing then you could be knackered) - although i stand to be corrected on that.

UrWntr

ACG wrote: »

Just do it in yours or your partners name - the money would get paid to you. You can then use the money to clear your mortgage.

You dont need to. Most companies insure your house for a rediculous sum of money (anywhere between £500k and £1 million is failry common). So unless your house is valued over that or close to then dont worry.

Im pretty sure its from exchange of contracts, as thats the date you are liable for any pull out (so if the house were to fall down between exchanging and completing then you could be knackered) - although i stand to be corrected on that.

Thanks ACG but it clearly states in the terms and conditions of my offer of loan:

"We must either be named on your buildings insurance policy as a joint insured party or our interest as mortgagee must be noted on the policy."

*Scarlett

Usually when getting quotes you will be asked if the property is mortgaged but it doesn't always give you the option to name the lender.

If you have found a quote online that you are happy with, give the insurer a ring. They should have the facility to add to mortgage lender for you as having a financial interest in the property.

Take a note of your online quote reference details and hopefully they will honour the online price - they all want your business after all.

kingstreet

Pick your insurer. A flat/bedroom-rated plan may be cheaper, so don't just look at those based only on the rebuild cost.

Put in your application. Ring/email them to ask the lender's interest be noted on the policy. They normally ask for the lender's name and your mortgage account number.

Put buildings insurance on risk from exchange and contents from completion.