Is it compulsory to be home insurance through your mortgage company?

If you are thinking about securing a mortgage on a new home, there are other factors that you need to bear in mind such as the fact that you will need to arrange home insurance cover.  Therefore, you need to be aware of what compulsory types of home insurance your lender will force you to add to the cost of your mortgage, as well as the types of home insurance that it may benefit you to add to your mortgage to ensure that you are covered at every turn.

In the same way that a mortgage can be hard to negotiate and obtain, home insurance can also be quite confusing as there are many different kinds and many different providers.  Sometimes the lending bank or other institution will not leave you many options as they prefer you to choose their coverer, however, many other times finding and securing home insurance will be left up to you, which is why seeking the advice of policy expert may be in your best interests.  With the aid of policy expert navigating through the world of home insurance will become much simpler.

One of the types of home insurance cover that you will be forced to take out is commonly referred to as compulsory insurance.  Within this group of cover usually falls building insurance, contents insurance, and sometimes insurance against ‘acts of god’ which include earthquake, floods, and other weather related tragedies that can cause severe damage to a home.

This is usually dependent on where you live since certain areas of the UK are prone to such weather related problems, while other areas are under a significantly lower threat and thus this insurance type will not be required.

Another type of home insurance that you will need to consider is life insurance, which usually includes an automatic pay-off of your mortgage in the event of death.  This type of home insurance cover is provided so that if something were to occur to you or your spouse depending who is listed on the cover the home would be paid off in full thus allowing your surviving family members a place to stay without concern.

Many people believe that this is also compulsory home insurance, but in most cases it is not although if you have dependents in your home it would be foolish not to pay a little extra each month for peace of mind.

Finally, given the economic state and the sheer fact that disaster can strike at times when you least expect it, it is a good idea to look into MMPI or Mortgage Payment Protection Insurance which protects you in the case that you become disabled, lose your job, or suffer from an accident that forces you to lose your source of income.

For protection during temporary illnesses that may impair you from working Critical Illness or Income Protection is also recommended because these types of home insurance will save you from losing your home when you are in the worst position to do so.