Compulsory insurance on a mortgage: everything you need to know
When you think about taking out a mortgage, one of the questions that comes up is whether you need to take out insurance. The law does not require you to take out specific insurance to obtain a mortgage. However, banks generally require two types of insurance: multi-risk home insurance and life insurance. Let’s explore the function of these insurances and how you can choose the best option for you.
What are the insurance requirements for?
Life Insurance
Life insurance is essential to protect your family and your investment. This insurance guarantees that, in the event of the death or disability of one of the credit holders, the amount owed will be repaid (partially or totally), easing the financial burden on the remaining family members.
Multi-risk home insurance
Multi-risk home insurance offers comprehensive cover against material damage to the property. This insurance protects your home against fire, flood, theft and other unforeseen events that can cause significant damage. Having this insurance ensures that, in the event of a claim, you will have financial support to repair or replace damaged goods.
Freedom of choice when taking out insurance
Although taking out these insurances is a requirement of the banks in order to grant credit, you have complete freedom to choose where to take them out. You can choose to take out insurance directly with the bank or use an insurance company or insurance broker. Each option has its advantages and disadvantages:
Take out insurance with the bank
Taking out insurance directly with the bank can be more convenient. The process tends to be more streamlined and banks often offer a reduction in the credit spread in return. However, it is important to bear in mind that bank insurance prices can be higher.
Take out insurance with an insurer or intermediary
Opting for an insurer or insurance broker can result in better price conditions. By comparing different offers, you can find cheaper insurance or cover that is more suited to your needs. However, be aware of the insurance companies’ rates, as they can vary over time.
How to make the best decision?
Before deciding where to take out your insurance, it is essential to compare the various offers available. Here are some steps to make your decision easier:
- Assess your needs: consider which covers are essential for you and your home.
- Compare prices and coverage: don’t just focus on the price; also analyze the coverage offered.
- Consider the bank’s conditions: see if the bank offers any reduction in the spread or other advantages.
- Consult an expert: talk to one of our insurance experts, we’ll show you the best options on the market.
Our insurance experts are here to support your decision. We can analyze the various proposals available on the market and recommend the one that best suits you. Count on us to make sure you choose the insurance that offers the best protection at the best price.
