Nationwide Insurance Validation legal?

Hi,
Just wondering if anyone else has experience of this and any ways of fighting it. Are they allowed to legally do this?

I have had a buy to let loan with Nationwide for 15+ years and have been insuring my properties every year. In March I received a letter from Nationwide saying that from now on I would either have to take out their own (very expensive insurance) or have my own policy validated every year at the cost of £100 plus VAT per policy.

I spoke to my insurance broker and his comments were as follows:
"I would complain about restrictive practice and unnecessary fees on the basis that:
1. The contract I signed with the lender did not include that I would have to insure with them or pay for a Third Party to check the cover I'd arranged was adequate.
2. That if it was important, I should have been informed of the minimum acceptable cover as part of the contract terms."

Any help or suggestions will be very gratefully received.

Thanks
Angela :)

Replies

  • roonaldoroonaldo Forumite
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    Is it legal? yes. 1, its not a legal matter. 2. if it says in the mortgage t&c that they can amend the t&c with notice then fine.

    But, £100, are you serious? that's extortion, I wouldn't be happy either. It's just not fair as too excessive. I would certainly complain but not sure if it will get anywhere.
  • dunstonhdunstonh Forumite
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    I have had a buy to let loan with Nationwide for 15+ years and have been insuring my properties every year. In March I received a letter from Nationwide saying that from now on I would either have to take out their own (very expensive insurance) or have my own policy validated every year at the cost of £100 plus VAT per policy.

    As it happens, virtually all lenders have the right to vet your buildings insurance. However, nowadays hardly any do. It used to be about 20 years ago that it cost £25 if you took your insurance elsewhere.
    I spoke to my insurance broker and his comments were as follows:
    "I would complain about restrictive practice and unnecessary fees on the basis that:
    1. The contract I signed with the lender did not include that I would have to insure with them or pay for a Third Party to check the cover I'd arranged was adequate.
    2. That if it was important, I should have been informed of the minimum acceptable cover as part of the contract terms."

    As they are allowed to do it as its a condition of lending, I am not sure I agree with point 1. However, £100 seems over the odds for something that used to take a unqualified bank clerk about 10 minutes work.
    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
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