MORTGAGE LIFE INSURANCE

Does the bank have the right to oblige you to contract life insurance with its affiliated insurance company when you take out a mortgage?

The reason for writing this blog post was a call from one of our clients, who shared the good news: the bank has approved his mortgage on very “attractive” conditions. Indeed, the interest rate is quite low, but the bank offered to take out life insurance through its insurance company with one-off payment of five-digit amount.

We often issue life insurance for the clients who have a mortgage and want to take out a policy to protect their loved ones from eventual debt problems in case of unfavourable development of the situation. Our experience allowed us to make a clear conclusion – the conditions of insurance offered by the bank in this case are disadvantageous. And many clients who buy real estate in Spain are facing quite similar situation.

So, what are the most important things you need to know when negotiating mortgage life insurance with the bank: 

First of all, according to the new mortgage law, which came into effect in 2019, when issuing a mortgage, the bank has no right to oblige the client to take out mortgage-related insurance policies with the bank’s affiliated insurance companies. The client has the right to choose an insurance company that offers the terms and conditions which suit the best his preferences and budget.

In some cases, the bank offers a lower mortgage interest rate subject to issuance of life insurance with its affiliated insurance company. In this case, it makes sense to calculate if the difference in the interest rate you get outweighs the potential economy you can get if you take out insurance with another company.  In some cases, it is more advantageous to accept an average market mortgage interest rate (without discount) and take out a much cheaper policy with an insurance company of your choice.

The form of payment for a life insurance policy may vary. Banks often offer a one-off payment for the entire duration of the mortgage, which is charged when you take out the policy. Furthermore, this insurance premium is often included in the amount of financing provided, i.e. you annually pay to the bank the interests on the loan you get to finance your one-off life insurance fee. You can choose an annual form of payment instead with annual policy prolongation. In this case, if one year you are not comfortable with the terms of the policy, you can change the insurance company by notifying the insurer that you do not want to renew it at least one month before the date of its annual automatic renewal.

Insurance coverage vary. Often, insurance policies offered by the banks are far from being the best value for money, and you can find a policy with a significantly better price/ covered risks ratio in the market. The life insurance contract clearly specifies the list of insured events and exclusions. Top insurers offer policies that provide for compensation in case of death for any reason, except for the risks deliberately excluded by the terms and conditions of the insurance company. Moreover, the contract may provide for payments in the event of absolute and total disability. Some companies include extra services, i.e. related to legal support in inheritance related issues.

When taking out life insurance, you need to consider thoroughly all term, conditions and circumstances in order to get a quality policy on the terms that suits you. The analysis of a case presented by the client who has applied us allowed to offer him a solution which costed 50% less than the one offered by the bank. In absolute terms, the amount of saving turned out to be important.
If you have any doubts about the taking out insurance when you get a mortgage, we are always happy to advise you free of charge and offer the most advantageous options available in the market. We do not charge any additional fees for the policy selection or issuance. By spending just a few minutes on a phone call or sending us an e-mail you can save a substantial amount of money. Call us: 677455883, e-mail: info@justinsurance.es.

INSURING PROPERTY AGAINST BURLGARY: MUST KNOW

Many people associate Spain with a relaxed and measured lifestyle. And that is the way it is. However, unfortunately, there are no absolutely ideal places, and thefts and burglaries, although rare, do occur here as well.

That is why it is worth taking care of protection of your home, both in terms of security measures (installation of alarm systems, secure locks, video surveillance), and in terms of getting a reliable and correct home insurance, which will not only compensate for damage if a trouble occurs, but will also save your time and money.

The terms and conditions of insurance companies in respect of compensation for losses resulting from burglary and theft vary.  Some companies may impose restrictions on certain types of risks or on certain types of property included in an insurance contract. So, let’s take a look what exactly and how can be insured.

Insured objects

 

Building and contents in general. Your insurance policy should specify the insured amounts of building and contents. Normally, insurance companies distinguish expensive items (e.g. jewelry) from personal belongings in general and set limits on objects of special value. Therefore, it is very important to know which limits the insurer has for specific types of property.

Jewelry. When taking out a policy, you should specify the value of jewelry kept in the house. Some companies set limits on the insured amounts for this type of property, the losses above the limit are not covered. In order to insure your jewelry properly, make sure that the insurance company you choose accepts the full risk. Among other factors, the maximum amount that the insurance company is ready to cover will depend on security in your home (in particular, a metal door, reinforced locks, alarm system, safe box). Especially expensive items may require a separate declaration in the policy.

High value objects. Each insurance company defines what is considered as high value objects in its insurance terms and conditions. Therefore, if you have any expensive items at home, such as paintings or expensive sports equipment, check if they should be declared separately  when taking out your insurance. When you insure  jewelry or high value items, we recommend to take photos and, preferably, keep documents confirming  their value. In case of an insured event, this will facilitate filing a claim and getting an appropriate compensation promptly.

Money. Insurance companies always set limits on insuring cash kept in the house. If the money is kept in a safe that meets the requirements of the insurance company, the insured amount may be higher. 

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Insured events.

 

Burglary. Here, we are talking about breaking into the house illegally, i.e. there should be some evidence that the trespasser committed illegal actions to get inside and didn’t enter the house through a door that you accidentally left open. The fact of the burglary should be obligatory stated in the police report, it should be indicated clearly that it is “ROBO”.

Damage to the house due to the burglary. If the burglars have damaged your property, e.g. scratched the floor, walls, furniture or broke windows, it should be covered by a good insurance policy.

Theft. If there are no signs of break-in and the thief has entered the house due to negligence of some basic security measures (for example, you went to the pool leaving the door on the terrace open), then this is considered by the insurance company as a theft and is compensated within a specific limit set by the insurance for this risk. Most frequently, jewelry and high value items will not be compensated in such case.

Burglary from annexes. The insurance policy may have a special coverage limit on belongings stolen from annexes. For example, if your bicycle is stored locked in a separate house on your plot, it may be insured. Jewelry and high value objects usually are not covered by this guarantee.

Mugging. Insurance from the top companies cover a robbery in the street. That is, if you were attacked and your bag was stolen, the damage can be compensated for within the limit specified by the insurance company. Please note that reporting to the police is a prerequisite for filing a respective claim to the insurance company.

Fraudulent use of bank cards. If a criminal managed to charge a stolen bank card before you blocked it, with a good insurance policy you can compensate the loss within the establshed limit.

We would like to emphasize that in order to make an insurance claim in respect of any of the above mentioned cases, it is absolutely necessary to report the crime to the police.

Our article gives the most general examples of what and how may be insured, however the terms and conditions of insurers may differ significantly. 

We are always glad to offer you insurance which will meet your requirements and ensure your personal comfort level.

Everything you wanted to know about insurance in spain, but didn’t have time to ask

The coronavirus pandemic has changed our lives, and we have to spend a lot of time at home. For many people, the question is how to make good use of this time so that it doesn’t turn out to be “lost”.

We suggest that you find a couple of hours to look into your insurance policies. What do we mean? We believe that an adequate assessment of your needs (what and how you want to insure) and proper understanding of the solutions offered by the Spanish insurance market can significantly reduce insurance costs without sacrificing quality.

Over the years of working in the insurance market as an broker, our company has accumulated extensive experience both in risk analysis and selection of optimal insurance solutions, as well as in defending the interests of our clients before the insurers when handling the insurance claims.

Now, in our interactive blog our team of specialists is ready to share with you the experience to help you form the package of insurance coverage that will allow you to feel comfortable and secure with minimum expenses.

Find out everything about coverage and services you can get with home, car, health or any other type of insurance. Ask your questions in the comments and our specialists will be back with detailed and clear answers. You will get competent advice free of charge, without any commitment on your part.

Make the most of your time and you can convert your knowledge into substantial savings!