There is a single obligatory mortgage insurance, which protects the borrower in the event of accidents to the building for which the loan was signed: this is the theft and fire policy. As is known, the loan consists of a particularly onerous loan, given that it undertakes to repay the amount received on loan for the purchase of the house for a certain period of time. The contracts also include very long depreciation periods, with the recognition of a certain fixed or variable interest rate. Given that you have been in debt for so long, it would be really bad if the building was damaged by an accident and lost value. For this there are special insurance policies.
The outbreak and fire policy
As mentioned at the beginning of our analysis, is the only mandatory policy, which must therefore necessarily be contracted at the time of the stipulation of the loan. This insurance will protect the value of the property, in favor of the borrower, but also of the bank, which may have accepted a mortgage on that property and does not want to see it depreciate. The insurance obligations for the borrower end at this point.
First of all, the bank that delivers the mortgage cannot impose its own insurance offer. Often the bank binds to the loan a policy issued by its insurance arm or, more frequently, by a contracted company . The customer is not required to accept this offer and the bank should not threaten not to disburse the loan in the event of a different choice by the customer. The latter is in fact free to carry out a search and search for a company that offers a more convenient proposal or one closer to its needs.
There is no obligation to subscribe to other policies
Which are therefore optional. Among these, we recall the insurance against the loss of employment by the owner of the loan or that which is triggered in the event of his death. In any case, the cost of the compulsory mortgage or optional insurance will be calculated within the APR , the annual percentage rate . This is a measure of the interest rate to be paid on the mortgage, which also calculates all ancillary expenses, including insurance.