Does house insurance have to be agreed by mortgage lender?

winnie1988

I have to organise house insurance before we exchange contracts and we have been told the bank need to agree it first - is this the case or can I just pick my own one?

Quentin

The lender stands to lose out if the property isn't properly covered.

Previously lenders organised the cover and passed the cost on to you.

Now you can go to your own provider, but the lender can impose the condition you now have come up against.

Many insurers will pay any admin charge the Bank makes for checking out your policy.

kingstreet

Ask your solicitor for a list of the lender requirements from the CML Handbook.

It's usually things like;-

index linking
excess for subsidence, heave & landslip no more than £1,000
lender's interest noted in the policy
fire, theft,storm, flood etc covered.

This may be of help;-

http://www.bllaw.co.uk/pdf/RESPROP_0808_Arranging%20your%20own%20buildings%20insurance%20cover.pdf