Home insurance - assigned to Bank - include content cover or get a separate insuranc

Monfreid

Hello,
I'm going to build a house and my mortgage has been approved (received letter of offer).

The bank needs the mortgage protection and home insurance policies to be assigned to them.
I've read on some forums that you should not take mortgage protection with the bank as you may have problems in the future in case you want to switch your mortgage to another bank. So having subscribed your mortgage protection yourself will give you that freedom if you want to switch one day. I also read that you should not include serious illness cover with your mortgage protection policy because this one is assigned to the bank so you'd better off taking your own serious illness cover separately if you want.

Now, for the home insurance, I'm looking for advice since this policy also needs to assigned to the bank because, as they said, they will have first legal charge over the property. So if you follow the same logic than the one for Mortgage protection, should I take home insurance alone for the house (assigned to the bank) and then another home insurance for content only?

Thanks in advance for your advice

To Elland Back

Firstly, I would never take out ANY insurance policy with a bank. That's just my opinion, but based on my dealings with them on insurance over 35 years in the business.

With regard to your household cover, their Interest is only ever noted on the Buildings section. Claim payments for building damage are made in the joint name of you and the bank. There is no harm in having a combined policy with your Contents. Any claim for that cover is made payable solely to you

Edit; A combined Buildings & Contents policy is always cheaper

coylemj

To Elland Back wrote: »

Edit; A combined Buildings & Contents policy is always cheaper

+1 and unless you claim to be a landlord, most of the regular insurance companies will not sell you a 'building only' house policy.

Shop around, you don't have to take out mortgage protection or house insurance via the bank.

Nortcider

Note also that separate policies carry their own excess. If you were to claim for an event that causes damage to both the buildings and contents you will have to make two claims and pay an excess on each. Also dealing with two insurers can be messy. A single policy is the way to go.

coylemj

Nortcider wrote: »

Note also that separate policies carry their own excess. If you were to claim for an event that causes damage to both the buildings and contents you will have to make two claims and pay an excess on each. Also dealing with two insurers can be messy. A single policy is the way to go.

+1 Having a single policy also eliminates the risk that you fall between two stools when it comes to certain items. You could for example end up in a situation where both companies tell you to claim from the other guy because one says an item is a fitting and the other crowd say it's furniture. Having it all on one policy means you deal with one crowd and everything is covered.

Monfreid

thank you all for your comments and advice :-)