Buildings Insurance
If you do opt for this route the lender will make it a requirement that insurer adheres to this criteria :
The insurance company is reputable
The lenders interest is been aware of and holds some decision making stake.
The cover is index-linked to so it is not eroded by inflation.
The lender is notified as the client is unable to make payments so it can take over the payment and debit the home mortgage loan account accord.
The lender is notified of any large claims
The large claims (large claims defined as over £1000) are paid directly to the lender not the policy holder.
In recent years however many lenders have started stating clauses in the mortgage loans that you will need to take up a policy exclusively with them as they can guarantee that the insurer is a reputable provider that is sure to pay out in the event of a disaster.
It is ALWAYS advisable to check for just how much you are insured for.
If you are underinsured then in the event of a disaster the insurance company will most definitely scale down the construction to the level of cover you have opted for.
What that mean varies again to how your insurer handles its affairs.
