Mortgage lenders interest must be noted on policy?

Marca_2

Hi all,

Would really appreciate some help with the following, Im tearing my hair out!

Just purchased a new home, first time buyer. Trying to sort out home insurance and have been told the mortgage lender must have their interest noted on any policy. However, having tried to take out a policy with a couple of major companies have been told they no longer do this? Have also been told the lender should not be asking for this and that it controvenes some legislation recently introduced by this government?

Any help would be fantastic... any one with similar experiences, knowledge of the issue and how I might go about resolving it.

Thanks in advance!

Radiantsoul

The mortgage company will presumably want the building insured as if it burns down they are screwed!
I can't see why it contravenes any legislation. It may do if you have to get it via the mortgage company. I would just get whatever insurance is cheapest and give the mortgage company a call to tell them who you have gone with if the company don't notify automatically.

kingstreet

AIUI the old ABI/BBA agreement expired, so now insurers are suggesting they no longer have to note lenders' interests or have them as joint policyholders, as some lenders once required.

http://www.eversheds.com/global/en/what/articles/index.page?ArticleID=en/Financial_institutions/FIG_Property_banking_briefing

“Noting” of a lender’s interest

The implications of noting a lender’s interest on an insurance policy is widely misunderstood. It is often assumed, incorrectly, that it provides the lender with the right to any insurance proceeds paid by an insurer. In fact, a lender whose interest is noted, is currently entitled to no more than notification by an insurer of cancellation or non-renewal of the policy or of any amendment to the terms of cover.

This entitlement was formalised in 1992 in an agreement between the Association of British Insurers (“ABI”) and the British Bankers’ Association (“BBA”).

However, the ABI has recently announced that it intends to withdraw from this agreement. The notice period for the withdrawal, and the approach of individual insurers on a case by case basis, have yet to be confirmed, but the outcome will be that banks will no longer be able to rely on receiving notice from insurers of changes that might affect their security.

In light of this development, it is worthwhile reminding lenders of the other options available to them, which are set out below.

dotdash79

I had to do this at the start of the year and RSA allowed this.