What is the best travel insurance for traveling outside of Spain? We list the most competitive insurers in quality-price life insurance
If you own an apartment, it is more than likely that you also have a mortgage to cover the expense of the purchase. In fact, a large part of our salary usually goes towards that expense…
When taking out a mortgage at any bank, they usually offer us other complements to cover other situations: home insurance, life insurance… This was very common to be offered, not as a voluntary complement, but as something necessary to formalize the mortgage. the mortgage completely. Well, you should know that with the new Mortgage Law the bank cannot impose its insurance on you when taking out the mortgage . And, for example, taking out life insurance through a bank can be between 30% and 50% more expensive than through an insurance company , or even higher. These data are based on a study carried out by INESE and the consulting firm Global Actuarial. To avoid hiring something that neither interests you nor is worth it, keep reading.
Why do banks force us to take out insurance?
Banks usually offer us to take out their insurance because it is usually a way to guarantee that, in the event of any unforeseen event, they can recover the money from the loan granted. By having one or more insurance policies attached to the mortgage, such as pension plans, mortgage life insurance or home insurance, what is done is that the bank guarantees your benefit in the event that something happens to the owner through from life insurance (since the bank appears as beneficiary) or if something happens to the property, through home insurance. Thus, the bank manages to secure its investment, always.
With the new legislation, the bank can force you to take out life or home insurance, but what they cannot do is force you to do so with them . You can search and select those that interest you the most, with the best conditions you obtain.
What to take into account when contracting these insurances
If we negotiate a mortgage with the bank and we have to take out additional insurance, it is important that we do it with consistency and guarantee.
Home insurance
We must be clear about the contracted coverage. In most cases, if we take out home insurance with the mortgage, we find that the coverage is only associated with the continent.
As we have pointed out before, the bank tries to offer insurance that benefits them. Therefore, their interest is to protect the property, not what is inside, which are your belongings. You should be clear about what type of coverage the insurance offers you and that they cover not only the structure but also what is inside.
Life insurance
In this case, we must identify the capital and coverage to be contracted. That is, what money should I invest and what will it cost me, and what will it cover me. Typically, and according to the aforementioned study, life insurance associated with mortgages usually only covers death. We must know that for a coverage of 120,000 euros it has been proven that the cost increases between 32% and 42% with the bank.
Keep in mind that they cannot force you to contract depending on which coverage and the same thing happens with the capital. Analyze what you need in order to guarantee your safety and that of your family, and hire what protects you and benefits you in equal parts.
News of the Mortgage Law
As we have indicated, these changes are motivated by the new Mortgage Law. Included in Law 5/2019, of March 15, regulating real estate credit contracts, in it we can find three important developments:
- The Documented Legal Acts Tax is no longer charged to the people who sign the mortgage.
- The notary, registration and management costs are assumed by the bank and not by the buyers as previously.
- And the mortgage cannot be associated with other products sold by the bank, although they may require them to be contracted. In this case, as we mentioned, they may require home insurance, but they cannot impose the provider.
With these changes implemented, at Moné we want you to get the best benefits for yourself when taking out your mortgage. If you take out insurance, don’t be afraid to compare and look for those that are most suitable. We can help you find the best home insurance and life insurance to enjoy your new home without headaches.