Buildings Insurance MUST be taken with Mortgage Provider?

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This topic contains 1 reply, has 2 voices, and was last updated by Profile photo of Anonymous Anonymous 4 years, 9 months ago.

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  • #56534
    Profile photo of Anonymous
    Anonymous
    Participant

    Just looking for some advice please. We are in our 4th year with a Barclays mortgage. Although we didnt ask for it, they have just given us a ‘financial health check’ at the local branch where we have been asked to submit recent pay slips etc (they said they do with all their customers on a regular basis) We have never missed a payment or been late but they said it is to prevent ‘money laundering’!

    At this time they have told us that we MUST take out our buildings insurance with them and not any other provider. We have been insured since we completed on the property for buildings and contents with another company and have offered to give Barclays a copy of this. However, they say it is ‘Spanish Law’ that your buildings insurance is done through your mortgage provider for the term of the mortgage (and not just for the first year)

    Is this true? Has anyone else had the same issue with Barclays or another lender? Its not a major problem but it means you can’t shop around for a competitive quote. Wished we had never gone in the branch now! Usually do everything on line but just popped in to drop off the non residents declaration form and got sucked in to managers office!

  • #107967
    Profile photo of Anonymous
    Anonymous
    Participant

    You are not obliged by law to take out insurance with your mortgage provider, though you are obliged by law to have building insurance and your mortgage provider must be a beneficiary. Also, some mortgages offer better terms if you take out other products like insurance (though that might be against consumer protection laws), so you need to make sure that isn’t one of the conditions of your mortgage. You need to check with a lawyer, but all in all it sounds like they might be trying to bully you into taking out insurance through them, which of course means more fees for them.

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