Mortgage insurance companies. Mortgage insurance
Hello! Mortgage insurance - where is it cheaper and more profitable to get it? An interesting question that must be dealt with if you decide to take out a mortgage. Further in the post we will analyze where mortgage insurance is cheaper. Which insurance is worth taking and which is not, as well as the basic conditions of insurance companies.
In the last post, we figured out that there are three main types of mortgage insurance:
Only the first type is mandatory. The rest is optional, but this will entail certain sanctions, including refusal of a mortgage. Read our post "Mortgage Insurance" to learn more about all the nuances.
Before you go looking for the most favorable insurance rate, you need to contact the bank and take a list of accredited insurance companies from a specialist or on the bank's website. You can get mortgage insurance only in these, pre-approved to work with the bank, insurance.
As a rule, banks issue the so-called comprehensive insurance. This is an insurance policy for all three types of the above insurance at once. Usually its cost does not exceed 1% of the loan amount, but in most cases even less from 0.2% to 0.5%.
The final tariff depends on many factors:
- Lender's bank - the lowest rates can be found in Otkritie Bank and Rosselkhozbank from 0.2%. This is made possible through special agreements between the insurance and the bank.
- Gender of the borrower - for women the rate is lower.
- Weighing Client - Overweight borrowers may be denied mortgage life insurance or an increased rate.
- Borrower's age - the older the age, the higher the rate.
- Areas of activity - risky professions receive an additional multiplier when calculating.
- History of the relationship between the borrower and the insurance company - personal discounts for cooperation, a bonus for switching from another insurance company, etc.
Advice! If you want to save on an insurance policy, then make your spouse the main borrower, let your husband be. This will allow you to get the minimum rate.
From all of the above, it follows that the insurance rate is a rather individual thing, so there is no need to talk about exact figures, but you can reliably determine at least their approximate order. Let's take a look at the terms and conditions of the major mortgage insurance companies.
Sberbank insurance
In Sberbank, for example, they require mandatory insurance of the collateralized property, and the limit on the value of the property is not more than 15 million rubles, you will be charged 0.25% of the loan amount, and every year this percentage will be charged on the balance of the total debt.
Life and health insurance will cost you 1%, but it is at your request, however, in case of refusal, this percentage is added to the interest rate on the mortgage, more precisely, if you agree, it will be taken away.
In practice, it looks like if the approved amount is at 14.9% per annum, then with life and health insurance, the rate will drop to 13.9%. Well, and a wide range of insurance claims, which are insurance, has not been canceled here either.
Also, if you take a mortgage from Sberbank, then this is the only bank that does not require comprehensive insurance, i.e. title - optional condition.
If you want to change the insurance company, then “you can do it painlessly when the loan is fully repaid, then you will be refunded the insurance premium for the remaining months. Otherwise, no one will return the rest of the insurance premium to you, except for the case when you refuse before the start of the insurance, then the premium is paid in full.
VTB insurance
This is a comprehensive insurance, which includes insurance of collateral, title and life and health, i.e. one contract is concluded with you, for third-party banks for 1 year, for VTB for the entire term of the mortgage with an annual renewal, which means that it must be renewed every year.
On average, insurance will cost you 1% of the amount under the loan agreement, annually 1% is also charged on the loan balance. When changing an insurance company, the conditions are the same as in Sberbank, i.e. either full redemption or non-refund of the premium.
Regarding VTB, we must make an important remark that in 2017 they did not pass accreditation, as they submitted documents late, so at the moment there is no insurance for third-party banks. And, if, nevertheless, you want to insure exactly here, you will need to clarify this information directly with the bank.
VTB Insurance offers a discount for issuing a policy for a long period (1.5 or 2 years, etc.).
VSK Insurance House
In this company, there is no comprehensive insurance, only constructiveness and life. Life and health insurance will cost you about 0.55%, depending on the components specified in the health questionnaire, over 4 million. rubles - a medical declaration is required.
Structural elements are insured - approximately 0.43%; factors such as a gasified house, as well as the first and last floors, can increase this percentage.
Regarding the change of companies, here, in addition to the fact that in case of cancellation of the contract, if the application from the Insured was received before the start date of the insurance and no more than 5 days have passed from the date of the insurance contract to the date of cancellation, the premium will be returned to you in full, there is also a condition that in case of refusal within 5 days after the start of the insurance and from the date of the conclusion of the insurance contract to the date of refusal, no more than 5 days have passed, you will be paid a premium in proportion to the unexpired term of insurance
RESO
In RESO, conditions for Sberbank are different from other banks, for Sberbank property insurance is approximately 0.18%, life and health within 1%. For VTB, Raiffeising-Bank, Absolut-Bank and others - comprehensive insurance, where life and health are also up to 1%, property - about 0.1% and title - about 0.25%.
In RESO, not only in case of early termination of the contract within 5 days after the conclusion, but before the start of the insurance, the premium is paid in full. In case of early termination at your request, the company refunds insurance premiums for the unexpired term of the contract, minus the costs incurred, unless otherwise specified in the insurance contract.
It should also be noted that at the moment in RESO there is an action "Profitable Mortgage", a 40% discount for the first year for a mortgage and for those who decided to change the company.
Alliance (Rosno)
In the Alliance, life and health insurance will be 0.87% of the insured amount; property insurance - 0.16% and title insurance - from 0.18%. For Sberbank, they do not insure, because there is no accreditation. Now the company is undergoing a campaign on mortgage insurance, which means that when you issue a mortgage insurance policy, you can insure additional risks at discounted prices:
- interior decoration of the property (wall, floor, ceiling decoration);
- third party liability insurance for the operation of residential premises;
- increase in the sum insured for life and health;
- increase of the insured amount of the property to the market value of the property.
It should be noted that in connection with the closure of offices in the regions, services are provided by the Central Moscow office.
Rosgosstrakh
Life and health insurance for Sberbank - 0.6% (man) and 0.3% (woman); property - from 0.2%.
For VTB and other banks - life - 0.56 (man), 0.28% (woman), respectively; constructive - 0.17%; well, and title insurance - 0.15%. Discounts are possible upon agreement with the Central Office, but the size is determined individually in each case.
The sum insured is reduced in proportion to the decrease in the loan amount. Early termination of the insurance contract on your initiative is also provided here only in case of full early repayment of the loan, in this case you are paid a part of the premium paid for the remaining period minus 65% of the paid insurance premium. For other reasons, early termination on your initiative is possible, provided that the insurance premium is non-refundable.
Ingosstrakh
Here you can insure everything individually, or choose a comprehensive mortgage insurance, which, as you already know, includes property, life and title insurance. They do not provide approximate rates, you can only calculate the cost of insurance on your terms. Let's look at the example of a 38-year-old man, without bad habits, healthy, working in the prosecutor's office and a woman of the same age, but an engineer-estimator, the amount of their mortgage is 8,000,000 rubles, secondary housing on the 5th floor, owned for more than 3 years ... Insurance programs for Sberbank and other banks also differ here, so let's move on to the numbers:
For Sberbank:
life insurance - 35,518 rubles (man) and 25248 (woman);
Collateral property - 11 200 rubles (for each),
In total, we see that for a man - 46 718, and for a woman - 36448. Contracts are drawn up for 1 year.
For VTB and other banks:
life insurance - 44,418 (for men) and 18,176 (for women);
Constructive - 12,000 rubles (both for one and for the other);
Title - 16,000 rubles (for each).
As a result, you see that for a man in this case, comprehensive insurance will cost 72,418, and for a woman 46,176 rubles. For VTB, there is the possibility of concluding an agreement for the entire loan term with an annual prolongation.
You can terminate the contract ahead of schedule at your request on the same conditions as most of the previous organizations, within 5 days after signing the contract, you will be refunded in full the insurance premium, in excess, the premium is not refundable. Exceptions are, for example, the fact that you have not been issued a mortgage.
If you decide to change the insurance company to Ingosstrakh, then you will be provided with preferential conditions in the form of a discount of 5 to 15%, the exact amount of the discount is decided by the management: up to 3,000,000 rubles, the decision is made by the regional branch, above - by the central Moscow office.
Now there is such a promotion: if you have a mortgage insurance agreement concluded with this company, then for voluntary insurance (engineering networks, finishing, property, etc.) - a 20% discount.
Alpha insurance
In Alfa Insurance, you can also choose a comprehensive mortgage insurance, the term of which will be equal to the term of the loan and will decrease every year as the ship's debt is repaid. The contract is terminated ahead of schedule, identical to the terms of VSK Insurance House. When changing the insurance company, here you get a simplified procedure for drawing up a contract and more favorable conditions. The contract is concluded for 1 year.
As in all companies, there are different programs for Sberbank and other banks. But today the organization in question does not have accreditation for life and health insurance for Sberbank, so you can only insure property, it will cost 0.18% of the mortgage amount.
For VTB and other banks, you can insure for the entire term of the mortgage, to see the cost of insurance, we will again turn to our example (a man and a woman 38 years old and 8,000,000 rubles):
Life - 46,900 (man) and 30,452 rubles (woman);
Constructive - 9 200 rubles;
Title - 12,000 rubles.
Now you can see that the exact cost of mortgage insurance depends on many components, so all the amounts given in the example are approximate.
SOGAZ
Insurance in Sogaz is one of the most affordable:
- Constructive - 0.1% if you additionally take out insurance for decoration, furniture, plumbing and civil liability for a minimum of 1150 rubles.
- Life and health - 0.17%
- Title - 0.08%.
- Loan default insurance - 1.17%
In case of early refusal of the client from insurance (early repayment of the mortgage), a part of the fee for the unexpired term of the policy is returned, reduced by the share of the load in the structure of the tariff rate. For other reasons, there is no refund.
comparison table
Analyzing the above, we can bring everything into a comparative table for all the insurance companies we are considering using the example of all the same men and women with the initial data we took at the beginning of the post.
Bank | Property (constructive) | Life and health | Title |
---|---|---|---|
Sberbank | 0,25 | 1 | not |
VTB | 0,33 | 0,33 | 0,33 |
VSK | 0,43 | 0,55 | not |
Alliance | 0,16 | 0,66 | 0,18 |
RESO | 0,1 | 0,26 | 0,25 |
Rosgosstrakh | 0,17 | 0,28 | 0,15 |
Ingosstrakh | 0,14 | 0,23 | 0,2 |
Alpha insurance | 0,15 | 0,38 | 0,15 |
Sogaz | 0,1 | 0,17 | 0,08 |
Online calculator
To make a calculation, you must fill in the data on the calculator. It will allow you to calculate the cost of the policy with the risks you need and issue the policy online.
Outcome
To find out where mortgage insurance is cheaper, you need to take a few steps:
- Take a list of insurance at the bank or on our website.
- Analyze the list to find insurance where you have preferences.
- Analyze the list using our table.
- Find some of the most profitable options.
- Make a calculation on our online calculator.
- Call the insurance company and clarify the final rate for you.
Summing up the results of our post, we see that insurance significantly reduces the interest rate on mortgages, and refusal to insure the collateral is fraught with the bank's refusal in the mortgage, which means it is better to insure. And if you approach this issue with full responsibility, with the understanding that a mortgage is far from a short-term loan and anything can happen in our life, you will, of course, exclude possible risks that may affect your obligations in front of the Bank. Although, it's up to you to decide and any of your decisions will be correct for you!
And we are waiting for your questions in the comments, to which we will be happy to answer.
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Banks, providing a loan for the purchase of real estate, not only issue a mortgage on it, but also require mortgage insurance. Buying a real estate insurance policy is a prerequisite for any mortgage agreement. And what about other types of insurance?
General understanding of what mortgage insurance is
Mortgage insurance is a set of types of insurance that are designed to protect the financial interests of each participant in mortgage lending.
The need to conclude such contracts is due to the need:
- the bank - in obtaining guarantees of loan repayment, which allows to reduce the interest rate and increase the lending period in relation to consumer loans;
- the client - in obtaining financial support for the ability to fulfill their obligations upon death, disability, lower income, and others.
The main purpose of mortgage insurance is to redistribute risks between insurers, borrowers and lenders in order to increase the reliability of the mortgage insurance system.
Types of mortgage insurance:
- property insurance for a mortgage, which, according to the contract, was pledged, against the risks of loss or damage;
- personal, which is life and work ability insurance of the client (borrower or co-borrower);
- title deed is insurance against cases of loss of ownership of collateral as a result of termination of ownership.
As an additional option, insurers offer to insure the civil liability of the owner of the premises before:
- by third parties during the operation of the real estate object (for example, from cases of flooding of the neighbors' apartment);
- the creditor for failure to fulfill the assumed financial obligations (in the event of a delay, if it is impossible to make payments in the future).
The peculiarity of this type of insurance
Insurance of mortgage risks differs in that the beneficiary under the agreement is the lender (bank). In the event of an insured event, it is in his favor that the insurer will make an insurance payment. Its size cannot simultaneously exceed neither the amount of outstanding debt, nor the amount of damage incurred.
There is a scheme for paying the sum insured in a lump sum - immediately - upon concluding an agreement for the entire loan period. The scheme of annual payment of the sum insured is more common.
Do I need to insure an apartment every year with a mortgage? Yes. This is indicated in the loan agreement.
Legality of claims for the conclusion of insurance contracts
Real estate insurance for mortgages: whether or not it is mandatory - disputes have been going on for a long time, but there is a law and there is a judicial practice.
According to Federal Law No. 102-FZ "On Mortgages", mortgage borrowers are required to insure the subject of the pledge. The document does not say anything about other types of insurance.
Personal insurance for mortgages Art. 935 of the Civil Code of the Russian Federation is defined as voluntary. However, banks strongly recommend that their clients take out such insurance. It is optional, but its absence will lead to an increase in the loan rate by at least 1%.
The situation is similar with respect to title insurance. The client has the right to refuse, but the loan, as more risky, from the point of view of the lender, will be offered to him on other, less favorable terms than those borrowers who agreed to fulfill the requirements of the bank.
Judicial practice in relation to such disputes indicates that in most cases the requirement to conclude a life and health insurance contract is recognized as an abuse of freedom of contract, since they refused to issue a loan without insurance.
According to the Instructions of the Central Bank of the Russian Federation No. 3854-U dated November 20, 2015, the borrower has the right to refuse the insurance product imposed on him within 5 days from the date of signing the relevant documents. The amount paid by him must be returned in full.
However, the Central Bank of the Russian Federation explained that if the borrower refuses this service, the lender has the right to change the terms of the standard agreement and increase the interest rate.
This clause is already included in most mortgage contracts. Also, creditors widely use their right to terminate the mortgage agreement unilaterally due to the client's failure to comply with its terms. This provision is also spelled out in the loan documentation. The bank sends the client a notification with the requirement to either take out insurance, or he terminates the contract. The latter means that the borrower is obliged to repay the entire loan amount or he will face litigation.
An appeal of citizens (more often in the course of legal proceedings) that the condition of the need for insurance violates their rights is not accepted: the agreement was concluded under certain circumstances, about which the client was warned in advance.
The signature under the documents means agreement with the fulfillment of the requirements established by them.
Typical insured events
Insurance of a real estate object as an insured event usually assumes:
- fire, including one that occurred outside the insured object;
- household gas explosion;
- disaster;
- flooding resulting from an accident in the water supply, sewerage or heating system, even if the water came from neighboring premises;
- illegal actions of third parties (hooliganism, robbery, vandalism);
- falling on real estate of aircraft (their parts);
- identification of structural defects in the structure, which were unknown to the policyholder at the time of the conclusion of the contract.
You need to be prepared for the fact that the minimum package offered by insurers provides for payments only when the insured property has suffered significant damage.
For example, if the wallpaper was damaged as a result of the gulf of neighbors, there will be no payment, and if someone broke the window, then you can count on compensation for its cost. The entire balance of the loan will be paid only when the object is completely destroyed. In the case of a private house, if the foundation remains, then only part of the debt will be paid off, because, from the point of view of the insurer, the remainder of the building can still be used for the construction of new housing.
To get more guarantees, more reimbursement, you should take out a more extended insurance, but it will cost more.
The next type of mortgage insurance is life and health insurance of the borrower. Insured events under such a contract are:
- the death of the insured due to an accident or illness that occurred during the period of the contract;
- loss of ability to work as a result of illness or accident with the appointment of 1 or 2 disability groups.
What is title insurance for a mortgage is easier to understand from the list of insured events under such contracts:
- recognition of the purchase and sale as invalid (on the basis of clause 2, chapter 9 of the Civil Code of the Russian Federation);
- reclaiming housing (in whole or in part) from the buyer by persons who retain the ownership of this object.
This type of insurance is designed to protect the rights of a bona fide purchaser. The confirmation of the occurrence of the insured event will be a court decision. Payments under such agreements should offset the financial costs of the borrower and guarantee the lender to repay the loan.
In such cases, the insurance company has the right to provide full legal support, including representing the client's interests in court.
The problem of receiving insurance payments
The insurer has the right to refuse to pay insurance compensation in a number of cases. All of them are spelled out in the insurance contract.
Personal insurance for mortgage lending assumes, as an insured event, the establishment of the 2nd or 1st groups of disability or his death. In this case, the payment is made in full once. In the first case, the property remains in the ownership of the borrower, in the second it will be included in the estate and the heirs will receive it without any encumbrance (without collateral or the obligation to repay the loan debt). But for example, compensation under a life insurance contract will be denied if the death occurred as a result of suicide or a car accident, the culprit of which was the insured. They will not pay compensation even in cases where the client initially knew about health problems, the confirmation of which the insurer will find in his medical records, but did not inform about this when concluding the contract.
There will be problems with reimbursement for persons who have suffered from occupational risks, as well as for those in whose blood, at the time of the insured event, alcohol or narcotic substances are found that were not prescribed by a doctor. According to the law, the insurer in such a situation is not obliged to repay the debt.
If life and health insurance was issued for both co-borrower spouses, then in the event of the death of one of them, the debt to the bank will only be repaid by half, i.e. 50% of the loan balance. If the insurance was made taking into account certain proportions, then the payment will be made taking into account how it was spelled out in the contract. For example, in the event of the death of one of the spouses, the compensation may amount to 70% of the balance, while in the case of the death of the other, it can be reimbursed 30%.
In cases where there is no firm belief that the refusal of the insurance company is correct, you should contact a lawyer specializing in this area.
Already at the first consultation, having studied all the documentation, the specialist will be able to confirm or deny the legality of the insurer's actions and make an assumption about the advisability of protecting his interests in court.
How to save money on mortgage insurance
The insurance program offered by the lender's staff is usually a product that is disadvantageous to borrowers. Most banks act as intermediaries between the true policyholder, the organization with which the contract is in fact concluded, and which subsequently, if necessary, will make insurance payments, and the client. Accordingly, the lender is likely to have a discount from the "supplier" and at the same time make a premium to cover its own expenses.
As a result, an insurance contract concluded at the bank's office may turn out to be 10-20% more expensive than an agreement drawn up on the same conditions either from the insurer itself or from its other official partner.
If you decide to take out insurance directly from the insurer, check with the lender for a list of accredited companies. Despite the fact that any restrictions on choosing an insurance company according to the law are unacceptable, they can be established contrary to them. Therefore, it is wiser to check with the bank the list of accredited insurers.
Considering that the insured amount is calculated on the basis of the loan balance plus interest that will be accrued during the next year, then savings are possible due to early repayment of the loan.
The faster the mortgage debt is repaid, the less interest the borrower pays, the less the insured amount.
You should also consider the loan maturity date. Ideally, you need to guess the deadline for the full repayment of the loan by the end of the next insurance contract. If it did not work out, then you can, having issued the appropriate certificate from the lender about the absence of debt, contact the insurer with a request to return part of the insured amount according to the actual time of existence of the loan obligation (debt to the bank).
How to properly insure yourself with a mortgage so as not to overpay. When determining the sum insured, insurers take into account:
- client's age. The policy will be cheaper for people who are 25-35 years old;
- the price of a property - the more expensive it is, the more you need to pay the insurer;
- with personal insurance, they may be asked to undergo a medical examination, based on the results of which the cost of the policy will be determined. The fewer health problems a person has, the fewer bad habits he has, the more discount he will be given;
- the larger the loan amount, the larger the insurance amount will be assigned to be paid.
Summary
Mortgage Insurance: Mandatory or Not? An insurance contract for mortgaged real estate is required. The rest - formally not, in fact, the bank indirectly (through worsening credit conditions or even refusal to conclude a mortgage agreement) forces clients to agree with this requirement.
From a financial point of view, sometimes it is a little more profitable to agree to an increase in the loan rate, but refuse additional insurance.
Interest is accrued regularly on the balance of the debt, which decreases as payments are received to repay the loan, i.e. monthly or even more often. When determining the insured amount, the amount fixed at the beginning of the year is taken into account.
A reasonable solution to this issue is to fulfill the requirement of the lender, but conclude a mortgage insurance contract directly with the insurance company.
The benefit of the borrower with mortgage insurance is that in the event of an insured event, although the bank will receive the payment, the citizen will be released (partially or completely) from the obligations to pay the mortgage.
In difficult times, which are indicated in the insurance as insured events (loss of property, ability to work, etc.), this can be very helpful.
Considering the above, we can say that a mortgage is a risky project for the borrower and the insurer. A bank with a full package of insurance and the collateral risks less.
When buying an apartment on a mortgage, a bank client has something to worry about, in addition to insurance, but it is still necessary to carefully approach the registration of the policy - so that later he does not bite his elbows.
Credit insurance is one of the engines of the entire market: both life and nonlife. It is on him (in addition to OSAGO) that customers most often complain. The reason is not only that there is a “layer” in the form of a bank between the insurance company and the client, but also in the complexity of this type. Usually, the bank requires to insure not only the object of collateral (apartment or house), but also the life of the borrower, as well as the right of ownership (title). Both the seller (bank) and the "service provider" (insurance company) are interested in imposing the maximum package on the client. And the client, who is already paying interest on the loan, naturally wants to minimize costs. Let's figure out which of the mortgage package is mandatory and what you can refuse.
Let's begin with the only legally required type of mortgage insurance mortgage insurance is considered - according to Federal Law No. 102 "On mortgages (real estate pledges)". Article 35 of this law states that if the continuity of insurance is disrupted, the bank has the right to demand the early fulfillment of obligations under the loan, that is, the return of the entire amount.
Question sum insured - a separate topic, and a very important one, since the amount of payment under the agreement depends on it. As a rule, in most contracts, the sum insured is equal to the body of the loan (sometimes plus 10-15% to ensure that it will cover everything, including penalties for late payments). This amount decreases with the loan body from year to year. The rule applies regardless of whether you entered into an agreement immediately for the entire loan term or only for a year with subsequent renewal.
However, it is worth considering the possibility of expanding the amountindicated in the policy to the full market value of the apartment. Otherwise, if you lose your home, you will not be able to return your down payment on the loan. You can conclude an additional insurance contract not only for the construction, but also for the decoration of the apartment, as well as the property inside it. It is recommended to include also insurance of your liability to third parties, since the damage caused to neighbors from an accident in your apartment, of course, does not include ordinary property insurance. Paying a loan and paying neighbors for refurbishment can be too much of a burden for a mortgagee.
Life and title insurance is not mandatory by law, so in theory they can be discarded. In practice, however, most banks offer "preferential" (reduced) interest on a loan when concluding a comprehensive mortgage insurance contract. And if you refuse to insure life, then you may be offered such a rate that you will not even want a loan. Abandoning life and title insurance can reduce the premium by 60-80%, but usually a bank rate increase of even 1.5-2 percentage points negates the savings on this part of the insurance.
In addition, the risk of the borrower's death and disability / disability, in my opinion, is still worth insuring so that debts to the bank do not fall on the shoulders of heirs or relatives who are forced to support the disabled person.
If a bank requires you to issue a policy with a specific company, this is a violation of the Federal Law "On Protection of Competition" and the RF Government Resolution No. 386 - you can safely complain to the FAS. In any case, you should have a choice of insurance companies accredited by the bank.
That is, in theory, you can provide when applying for a loan an existing life insurance contractwith a term not less than the term of the loan agreement and for an amount not less than the body of the loan. However, in reality, the bank is unlikely to accept the previously concluded contract with a non-accredited company... First, the insurance documentation (policy and rules) of your personal contract is likely to differ from the one agreed by the bank. Secondly, the bank will definitely not be satisfied that you, and not he, are the beneficiary.
Besides set of risks in a standard life insurance policy (LI) may differ from that required by the lender. For example, in relation to credit insurance, some state banks require the mandatory inclusion of the risk of temporary disability in the contract, which is not included in the basic set of life insurance risks (death for any reason, death from an accident, disability of groups I and II for any reason and as a result accident).
Can be concluded with a company rider agreement for insurance of additional risks. For example, cancer insurance or against terrorist acts (usually these risks are not included in the standard coverage of SJ). Many mortgages believe that the policy purchased at the time of the loan will cover risks such as a broken finger or a burn. However, this is a delusion. If you have not entered into an accident insurance contract, you are not entitled to any payments - the finger will have to be treated at your own expense.
It should be noted that under any additional agreement, you yourself are the beneficiary, and not the bank. But the standard contract of insurance of your life and collateral is always in favor of the bank: upon the occurrence of an insured event, your loan will be repaid, and you or your heirs will receive the remaining amount.
An optional, but desirable, at least in the first three years, type, usually included in the mortgage package, is title insurance, that is, property rights. It is needed in case the contract of purchase and sale of the apartment is invalidated for some reason.
Many banks do not mind taking out title insurance only for the first three years of property ownership. However, at the same time, you need to understand that if the owners of the apartment appear who did not participate in the transaction, but had the rights to it (for example, illegally bypassed during privatization), then the risk of losing it will fall on you. According to clause 1 of Article 181 of the Civil Code of the Russian Federation, the limitation period for claims for recognizing a transaction as invalid is three years - if one of the parties to the transaction protested it. But in the case of a claim by a person who is not a party to the transaction, the limitation period may not exceed ten years from the date of the transaction.
Cancellation of title insurance will give you the opportunity to save about 0.15% of the loan amount per year (that is, with a loan body of 5 million rubles - about 7,500 rubles). So decide for yourself whether it's worth the risk.
"My home is my castle"
We know how difficult and responsible it is to decide to buy a home. The mortgage provides a real opportunity to fulfill the dream of improving living conditions.
Mortgage insurance is a reliable protection of the borrower of a mortgage loan from the risks associated with damage or destruction of property, termination and / or limitation of ownership of property, as well as harm to life and health. The insurance company will help fulfill the obligations of the borrower of the mortgage loan to the bank in the event of unforeseen circumstances *.
Insurance covers "structural" elements damaged due to:
Structural defects
Natural Disasters
Falls of flying (space) vehicles
Falling solids
Vehicle collision
Illegal actions of third parties
Title insurance: Risks associated with the termination and / or limitation of your ownership of the purchased property:
Termination of ownership (For example, as a result, the recognition of the transaction as invalid on the basis of a court decision).
Restriction (encumbrance) of property rights ( For example, as a result of the retention of the right to use property by third parties after registration of ownership (based on a court decision)).
Title insurance is especially important if the property is purchased on the secondary market. There are cases when, after the acquisition of real estate, it turns out (and the insured did not know about this earlier) that the rights of third parties (unaccounted heirs, minor children, previous owners, etc.) were violated in the last or previous transactions. And then, by a court decision, the borrower's transaction may be invalidated. Title insurance can protect against these and other cases of termination, as well as restrictions on the ownership of the mortgage borrower.
Personal insurance:Insurance against harm to the life and health of the borrower and co-borrowers as a result of accidents and / or illness.
The insurance risks under the contract are:
Death for any reason
Primary establishment of group 1 disability as a result of an accident or illness
A mortgage loan is usually taken for a long term. Personal insurance of the borrower will help ensure the fulfillment of obligations to the bank in the event of unforeseen circumstances related to the life and health of the borrower and co-borrowers.
** We can offer you coverage for a combination of risks, depending on the loan program you have chosen. Usually, for the most complete protection, borrowers choose a package from all the listed risks.
COST OF THE PROGRAM***
Tariffs for each agreement are set individually based on the analysis of documents for the pledged property, and data on the borrower (and co-borrower).
Property insurance - from 0.12% of the insured amount per year.
Property title insurance - from 0.21% of the insured amount per year.
Personal insurance - from 0.125% of the insured amount per year.
For example, the rate for a 30-year-old man / woman who has no health problems would be 0.2427% / 0.1463% of the sum insured for that year.
*** The insurer has the right to apply correction factors to insurance rates and individual insurance conditions based on the results of risk analysis when concluding individual insurance contracts.
HOW TO CONCLUDE INSURANCE CONTRACT
For your convenience, we have organized the work process in such a way as to save your time and effort.
When concluding an insurance contract for the issuance of a mortgage loan:
· All contacts with the insurance company will be made through your mortgage manager
· You do not have to bring documents to the insurance company - all the necessary documents will be sent for you by a bank employee.
· You can sign and pay the insurance contract at the time of the mortgage transaction.
When renewing the insurance contract:
· The invoice will be sent in advance to the email address you specified in your insurance application. You can pay the insurance premium at any bank by first printing out the invoice.
The insurance service is provided by LLC SOSIETE ZHENERAL Life Insurance, Licenses for insurance SL No. 4079 and SZH No. 4079 were issued by the Central Bank of the Russian Federation for an unlimited period, and LLC "SOSIE GENERAL Insurance",Insurance licensesSL No. 1580 and SI No. 1580 were issued by the Central Bank for an unlimited period.
For Property Insurance (Risk of loss or damage to property) and Title Insurance (Risk of termination (loss) or restriction (encumbrance) of ownership of property), the insurer is SOCIETE GENERAL Insurance LLC.
For life insurance of the borrower in case of death for any reason, the insurer is SOCIETE GENERAL Life Insurance LLC.
Health insurance of the borrower in case of establishing the initial disability of the 1st group - jointly by LLC SOSIE GENERAL Insurance and LLC SOSIE GENERAL Life Insurance (co-insurance).
When issuing a mortgage loan for the purchase of an apartment, banks put forward a prerequisite for borrowers - to take out insurance for the apartment, which is the subject of collateral.
The bank puts forward such a requirement for a reason: it is reinsured in the event that the borrower for some reason cannot pay off the entire loan. In this case, the insured mortgage apartment will be transferred to him and he will be able to resell it, return his money back.
What are the features of apartment mortgage insurance and how much does this service cost?
Why do banks require mortgage insurance for an apartment?
In most cases, people take out a mortgage for a long term - 15, 20, 30 years. During this time, various troubles with the collateral can happen: a fire can happen in the apartment, the neighbors from above can flood the house, as a result of a natural disaster the apartment can be destroyed.
And if the borrower does not fully pay off the loan, then the bank will have to put the apartment up for sale. Naturally, there will be no buyers for it if it is in a non-residential or emergency condition.
It is for such cases that the bank requires borrowers to take out insurance for the collateralized property. A person who wants to draw up a mortgage agreement has no right to refuse this type of insurance.
The borrower himself can choose any insurance company with which he wants to draw up a home insurance contract... The main thing is that the company is reliable and proven.
You can also ask the bank where the client draws up the mortgage agreement, information about insurance companies. By the way, many banks cooperate with specific firms, so if you are provided with a list of such firms, it will be great.
In addition, some banks can even lower the mortgage interest rate if the client contacts the insurance company that the bank recommends to him.
In addition to insuring the apartment, the borrower can insure his life and health, but this is an optional condition... However, banks are striving to ensure that borrowers take out several types of insurance. Then they further reduce the interest on the mortgage loan.
Apartment mortgage insurance rules
To get insurance for an apartment, you need to do the following:
- Choose an insurance company. You can trust the choice of the bank and choose the company that he offers.
- Read the insurance contract.
- Submit a request for a preliminary calculation of the cost of insurance (you can call the insurance company by phone, send a request to the email address).
- Write an application for execution of the contract.
- Transfer the required amount billed by the insurance company for its services.
How long can an apartment be insured with a mortgage?
The term of real estate insurance is discussed with the bank. Some lenders offer borrowers to take out home insurance for the entire term of the mortgage, while others - only for the first 1-3 years, after which the borrower is obliged to renew the contract.
It is necessary to draw up an apartment insurance contract for a mortgage immediately after evaluating the acquired property.
If an apartment is bought on the secondary market, then banks strongly recommend insuring it for the entire term of mortgage lending in order to avoid unpleasant situations (for example, if the former owners of the apartment want to return it, they will file a lawsuit).
To conclude an insurance contract, the client needs to submit the following documents to the insurance company:
How much does apartment mortgage insurance cost?
There is no specific figure. Several factors affect the amount of insurance:
- age, gender of the borrower, state of health;
- the size of the mortgage;
- features of the insurance object - an apartment in the primary or secondary market, material of structures, walls, ceilings, location of real estate, etc .;
- insurance period - the longer the period, the cheaper the insurance policy will be in terms of 1 year;
- availability of title insurance, etc.
On average, an insurance company takes for its services from 0.6 to 1% of the cost of an apartment issued under insurance.
In addition to the apartment, the borrower can take out title insurance. A title deed is a document that secures the borrower's ownership of the property.
To issue a title means to protect yourself from the risk of losing an apartment, which may be coveted by former homeowners or their relatives.
If the borrower does not take out title insurance, then he risks losing the apartment if the real estate seller submits false or incorrectly executed documents or if the procedure for buying and selling an apartment is violated.
Thus, title insurance protects the borrower from risks such as:
- falsification of documents when drawing up a sales contract;
- detection of errors made in the design and preparation of documentation;
- fraudulent actions of the apartment seller;
- ignoring the rights of a third party (heirs, close people of the apartment seller).
If any of the above events occurs, the insurance company is obliged to reimburse the borrower for the cost of the apartment at the market price.
Tax refund when signing an apartment insurance contract
Any citizen of the Russian Federation who works officially has the right to receive a so-called tax deduction when registering a mortgage agreement and real estate insurance.
The tax deduction is provided to the borrower only if the following conditions are met:
- if the borrower has issued a long-term policy for a period of at least 5 years;
- when making a deduction, the cost of real estate is taken into account;
- tax deduction is limited in size.
If the apartment, issued on a mortgage, was insured and a disaster happened to it - for example, a fire, flooding, then the new owner of the property must do the following:
- Immediately report the incident to the appropriate authority: to the emergency service - if an explosion occurs, to the police, etc.
- Inform the insurance company about the occurrence of an insured event in writing.
- Provide the insurance company with the required package of documents for the damaged property.
If the insurance company recognizes the fact that the damage has occurred to the apartment so that it falls under the insured event, then it will have to transfer the money to the bank before the time the borrower repays the mortgage.
Answers on questions
Is it obligatory to insure an apartment with a mortgage?
Yes, collateral insurance is a prerequisite... Without it, no bank will issue a mortgage to a client. But there is one caveat here: some banks ask to pledge an apartment that the borrower takes on a mortgage, while others allow the use of real estate that a person already owns as collateral (he has ownership rights to real estate).
How long is the mortgage insurance contract for an apartment?
In practice, such an agreement is usually concluded for 1 year or for the entire duration of the mortgage with an annual extension. This must be spelled out in the agreement concluded between the bank and the borrower. Usually the duration of the insurance is equal to the duration of the mortgage agreement.
Can the borrower change the insurance company if the mortgage agreement has already been drawn up?
Yes, he can do this, but he can conclude a contract with a new insurance company only after the previous contract expires.
When buying an apartment on a mortgage, banks require borrowers to draw up an insurance contract for the collateral. This requirement is justified, it is enshrined in the current legislation.
If life, health and disability insurance is not necessary to insure, then the borrower has no right to refuse real estate insurance.
Apartment insurance is necessary for both the borrower and the bank. As part of the insurance policy, the borrower protects the apartment from the risk of loss, damage or loss. And the bank insures itself in the event that something happens to the mortgage apartment, and the borrower does not want to repay the mortgage loan.
Video: Mortgage Insurance