Property insurance of an apartment with a mortgage. Property insurance for mortgage

Mortgage insurance is a separate type of insurance. There are some peculiarities here that you need to know about before signing documents for a mortgage. How is a home insurance policy issued for a mortgage? What are the conditions and how much will all this cost? All these nuances are very worrying for a person who has little knowledge of insurance issues.

Is it necessary to insure an apartment with a mortgage?

If taken necessarily. Before you decide to take out this type of loan, you need to think through a lot in advance. Typically, the bank requires you to insure not only the housing itself, but also the life and working capacity of the borrower himself, because he will not take risks and will require you to pay for comprehensive insurance. This is how a financial organization powerfully and completely legally protects its interests.

There is a Federal Law regulating credit relations, “On Mortgage” dated July 16, 1998. According to it, all real estate must be insured in order to minimize risks.

Without taking out insurance, a financial institution formally does not have the right to refuse a loan, but in practice such interest is charged that the person himself refuses to take money on such conditions. The bank is obliged to provide the client with a choice of which insurance company he will use to insure the apartment with a mortgage, but you cannot refuse this financial transaction.

The amount of insurance depends on the condition of the home itself. If you decide to insure your own life, as the bank asks, your health will be taken into account. There are a lot of nuances of mortgage insurance. Let's figure it out in order.

Apartment mortgage insurance. Features and nuances

What should you consider when signing a mortgage loan agreement? Banks that offer mortgages usually work with several large insurance firms. You, as a client, can choose any insurance organization, but only from the list of companies that the bank itself will indicate to you.

What other nuances are there? If the client refuses to pay for life insurance, bank employees have the right in this case to raise the interest rate for housing by 1%.

After completing all the documents, you can safely receive the keys to your apartment, which you are taking out on credit. Thus, it is also beneficial for the client. He is calm, knowing that in any unforeseen situations the insurance company will bear all the costs that the bank needs to reimburse.

All insured events for which payments are due are specified in the contract. You need to familiarize yourself with this list.

Types of mortgage insurance

There are several types of apartment mortgage insurance. We will look at the features of each below, but first we list them:

Object of insurance;

Health and performance of the borrower;

Housing title;

Borrower liability insurance.

Job losses.

It is clear that the object of insurance, that is, the house or apartment itself, is insured without fail. A sudden fire or robbery and vandalism - all these factors that take place in our lives cannot be prevented. When determining the amount of insurance, it plays a role whether the home is new or old, whether it has wooden floors, and wear and tear. Insuring a non-standard home, such as a secret house, will be more expensive than a regular apartment.

Separate mortgage conditions for those who take out a military mortgage. Military personnel are provided with certain benefits, and part of their loan is paid from the state treasury. However, in this case the military man himself must pay for insurance, and the benefits do not apply here.

It is better to insure your performance when you are in poor health or already have chronic illnesses.

Title Insurance

Let us explain in more detail what condo title insurance is. This type of insurance is needed when there is a possibility that you will not be able to have ownership of the purchased apartment. But these are rare cases. Usually, if the apartment or house has just been built and has not yet had an owner, it is absolutely not necessary.

Such insurance guarantees the payment of a certain amount from the insurance company in the event that some documents during the purchase and sale were incorrectly completed and your purchase is legally invalid. Your credit agent, that is, the bank, receives funds from the insurer.

How much will the insurance company pay? The agency will pay the difference between the amount you borrowed from the bank and the actual cost of the home. Moreover, only if you insured the received apartment for its full value, and not for a partial one.

The cost of such insurance is approximately 0.5% of the total amount, no more. The term of insurance payment within the framework of the law cannot exceed 3 years.

Life insurance

The main difference between such a policy is the dependence of the rate on the age of the insured person. The amount will also depend on factors such as the client’s profession and his general health. If the client has an extreme hobby or works in a dangerous industry, then the percentage will also be high.

You can insure yourself in the following cases:

Temporary loss of ability to work;

Disability;

Death of a client.

If the client died in prison, in war, or voluntarily exposing his life to danger, then the issuance of insurance to the family of the deceased will be denied.

There are times when the bank you choose forces you to sign a life insurance contract, even if you do not think it is necessary. What to do in this case? Prepare a certificate from the hospital in advance. If you bring a certificate stating that you are in excellent health and do not go to the doctor's office, the cost of such a policy will be minimal. In addition, when insuring life, the age of the client is taken into account. If he is under 40 years old, the interest rate in many banks is lower than in cases where the client is 60 years or older. Therefore, when applying for this type of insurance, it is advisable to ask several organizations to make calculations at once and choose among them the one that offers more favorable conditions.

The cost of home insurance for a mortgage. How to save money?

In principle, you can insure your home anywhere. But in practice, this issue is very strictly regulated by the bank. If you are taking out a simple consumer loan, bank employees will not particularly insist on insurance. But when signing a mortgage agreement, everything is much stricter. They often choose home insurance for a mortgage from VTB 24 or Sberbank. But where is it more profitable? Each bank has its advantages, but also its disadvantages.

If you choose life and home insurance for a mortgage at VTB 24, you can pay off the loan not in 20 years, but in 5. At the same time, the price of insurance is reduced by 25%. A special program is provided for this. However, if you choose insurance with VTB 24, you agree to pay for 2 policies: for the safety of the apartment and for your own life and health.

The cost of a policy in this organization depends on which program the client chooses. The client can also choose one of the proposed types of property insurance:

Loss of ownership.
Intentional or unintentional damage to housing by third parties.
Risk from participation in equity capital during the construction phase.

And will he want comprehensive insurance? For comprehensive insurance, all rate coefficients are reduced. You can choose an insurance program directly on the company’s official website.

But Sberbank offers only one type of compulsory insurance - for real estate; yet other types are voluntary. But you may be asked to purchase insurance for loss of title to your home. The average rate in this bank for this year 2017 is 0.225% per year of the entire amount of your loan obligations. But you can choose one of 19 other insurance organizations working together with Sberbank.

When calculating the cost of insurance for an apartment taken on a mortgage, the following factors are taken into account:

Your bank's requirements;

Loan size;

Condition of housing (technical characteristics);

Total insurance period;

Availability of previous transactions.

You can save a lot by purchasing a policy that provides comprehensive insurance. VTB 24 suggests saving in this way. That is, simultaneously insure all types of insurance offered by the credit institution.

But Sberbank will give a discount on the percentage if the client signs up. If some organization already insures your health and ability to work, contact it and insure your home there. You will definitely be given a discount. A discount can be obtained if a person has changed his occupation and his profession is no longer included in the list of life-threatening occupations. He will have to reduce his insurance premiums upon application. If you calculate all these nuances, you can take out a policy on fairly favorable terms. But, despite all the discounts, insuring an apartment with a mortgage is still a very costly investment.

Prolongation of the insurance contract

Insurance is paid for the entire period for which the loan payments are calculated. But the contract is usually renewed every year. If all conditions remain the same and the client is satisfied with the situation, the contract is simply extended. But when the situation changes in some way, certain changes are made to the document. For example, the client has already paid a significant part of the loan, and its repayment period has decreased. Consequently, the insurance amount will also decrease by some percentage.

Home insurance. Required documents

Of course, each organization has its own conditions, but they are all subject to the same laws of the Russian Federation for all insurance companies. Documents must be submitted to the insurance company correctly. If you do not have experience working with financial organizations, then be sure to consult with lawyers.

The list of documents is in most cases the same and includes:

Your Taxpayer Identification Number;

Statement;

Signed mortgage agreement;

Passport or other identity documents;

Documents confirming the ownership of housing;

Land deed if you bought a house on a plot.

After submitting and checking all documents, the client pays for insurance and the first installment. It happens that it is convenient to sign a tripartite agreement. The parties to this will be your bank, you and the insurance company.

In order for the insurance company to return the money when the insured event does occur, the following conditions must be met:

Bring the required documents listed on your copy of the contract.
Pay your dues on time.
Notify the agency about the occurrence of a particular incident, if it is specified in your contract.

The insurance company has the right to refuse payment if at least one premium was not paid on time.

Insurance cost

The cost for each type of insurance is different. And each bank, naturally, has its own rates and its own nuances. If you agreed to home insurance for a mortgage at Sberbank, the cost of the policy will be lower than at VTB-24, even if the transaction is completed with the same insurance company.

The insurance calculation formula includes the interest rate on the loan and the outstanding balance. Other nuances are also taken into account.

Payment of the fee is made only once a year. But if a client, for example, has begun renovations on a purchased apartment and is unable to pay this amount at once, we can agree on its breakdown. Then the contribution is divided into 4 equal parts and paid quarterly.

Insurance cases

The insurance organization provides for several insured events, upon the occurrence of which the bank will receive the amount specified in the contract. A home insurance policy with a mortgage in different organizations has different costs and, accordingly, insures several possible unforeseen situations. These usually include:

Problems with water pipes (flood);

Housebreaking;

Natural disasters;

Vandalism;

Ground subsidence;

Flooding when groundwater rises.

Some insurers also offer home mortgage insurance in case the building is hit by a falling plane. In short, the list of insured events can be quite wide. You choose the policy that you consider suitable. There is no need to pay for the entire list of insurance events.

Insurance compensation

A person signs an insurance contract simultaneously with a mortgage. All terms, including indemnification terms, must be specified in the contract you sign.

As for life insurance, the insurance must cover the entire remaining payment amount. If the client gets sick or injured due to which he cannot work, then the insurance company must pay your borrower from 50 to 70% of the due amount at this time.

Refund

If the client has already fulfilled all his financial obligations to the bank, can he get part of the insurance back, since insurance is paid at the beginning of the year, for all 12 months? If you were insured with VTB, then this is possible. To do this, you just need to terminate the contract early, and part of the money will be returned to you.

Since last year (2016), there has been a legal opportunity to demand a refund of money through the court if the bank imposed some kind of insurance on you.

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Questions and answers

Real estate insurance for a mortgage is a mandatory condition for obtaining a mortgage loan. By purchasing a policy, you protect your interests; if an insured event occurs, the client does not suffer financial losses. Insurance of purchased real estate will protect you in an unforeseen situation related to damage or loss of property purchased on credit.

A number of insured events have been identified, upon the occurrence of which compensation is due. Real estate insurance for a mortgage involves cash payments if the purchased property is damaged by the following factors beyond the control of the borrower:

fire, flooding;

other natural disaster;

technological disaster;

gas explosion;

illegal actions of third parties;

collision with a vehicle.

If an insured event occurs, the company servicing the policy will compensate for the costs of restoring the property. We work with reliable insurance companies. A large selection of programs is available to clients, due to which the cost of insuring an apartment with a mortgage will be optimal.

Cost of apartment mortgage insurance

The exact answer to the question of how much it costs to insure an apartment or house with a mortgage depends on many factors. Each company sets its own tariffs, which are influenced by the type of property, its market value and other factors.

DeltaCredit Bank works with a large number of insurance organizations, which allows our clients to choose the optimal and profitable program. Our specialists will help you calculate the price of insurance for an apartment or house and guide you through the range of offers for purchasing a policy.

The price of real estate insurance for a mortgage is always set on an individual basis. The borrower is required to renew their mortgage home insurance insurance annually throughout the life of the loan.

Mortgage lending is a long-term program, so you can use other insurance products. For example, take out title insurance that protects you from various legal risks. See details.

Object of insurance

Property interests of the Insured associated with loss or damage to insured real estate (apartments, residential buildings, cottages, garden houses, land plots).

Insured events:

Loss or damage to real estate as a result of:

fire;
explosion;
flooding;
natural Disasters;
theft;
robbery;
robbery;
intentional destruction of property by third parties;
other circumstances.

Sum insured

The insured amount is determined according to one of two options:

in the amount of the actual value of the real estate (the insured amount remains unchanged throughout the entire term of the Insurance Agreement);
in the amount of the loan balance (the insured amount decreases annually in accordance with the decrease in the loan balance).

Deadline for payment of the insurance amount

Amount of insurance payment

In the amount of actual costs for restoring damaged (lost) property, taking into account wear and tear on replacement parts and materials, but not more than the insured amount.

Car insurance

Object of insurance

Property interests of the Insured (Beneficiary) related to the ownership, use, and disposal of the vehicle, as well as additional equipment installed on it.
Property interests of the Insured (Beneficiary) related to the ownership, use, disposal of the vehicle and additional equipment installed on it due to their damage or loss (destruction, loss), including before the vehicle is registered.

Insured events:

Death or damage to the vehicle as a result of:

fire;
explosion;
collisions with another vehicle;
collision (impact) on stationary or moving objects (structures, obstacles, animals);
capsizing;
falling of any objects, including trees, snow and ice;
ejection of gravel, stones and other objects from under the wheels of vehicles;
falling into water;
falling through the ice;
natural Disasters;
illegal actions of third parties;
vehicle theft (loss as a result of theft, robbery, robbery).

Sum insured

No more than the actual (market) value of the vehicle; not less than the outstanding balance on the loan.

Deadline for payment of the insurance amount

Within 5 working days from the date of receipt of all documents necessary to make a decision.

Insurance premium amount

In accordance with the tariffs of the insurance company.
Detailed information can be obtained at any office of Sberbank PJSC.

Currently, mortgages have become a fairly popular way of purchasing housing. Naturally, such loans are not issued to everyone. First, the borrower must meet certain criteria. Secondly, banks also require that you take out insurance, and not just one, but several at once. In this regard, many potential borrowers have a completely logical question: is it necessary to take out all these policies?

Real estate insurance with mortgage

First, let's take a closer look at what exactly financial institutions require from borrowers when applying for this loan. A person wishing to take out a mortgage must provide the financial institution with documents that confirm both his identity and his ability to fulfill his obligations to repay the loan. However, these are not all the conditions for issuing a loan. As mentioned above, banks also require potential borrowers to take out several insurance policies. The logic of the financial institution in this case is very simple - it wants to reduce all possible risks to a minimum.

Clients are usually required to take out insurance for:

directly to the residential property;
life and health of the borrower;
ability to work;
mortgage liability.

It is immediately worth noting that according to the law, only the first policy is mandatory. In this case, its effect applies exclusively to residential real estate purchased on credit. At the same time, the legislation requires mandatory registration of such insurance, regardless of the market in which it is purchased. apartment/house – primary or secondary. Also, the status of the borrower does not matter here. Everyone must take out this type of insurance, including those who purchase housing with the help of the state.

Another important point is the choice of insurance company. Here the interests of both parties – the borrower and the bank – coincide. The main criterion in this case is reliability. After all, both the borrower and the bank want guarantees of payment in the event of an insured event. That is why you can only take out a policy from accredited companies, the reliability of which no one doubts.

For example, Sberbank, which is the largest financial institution in the country, cooperates with more than 30 insurance companies. Therefore, the borrower will not have any problems with the choice here. Other banks will also provide borrowers with a list of partners whose policies are accepted when applying for a mortgage loan.

Let's take a closer look at what requirements Sberbank imposes in this case. This financial institution operates strictly within the law. Therefore, when issuing a mortgage, the client is required to take out only insurance for the property itself. It is best to issue a policy through a subsidiary of a financial institution - Sberbank Insurance. However, you can use the services of some other company from the list of accredited ones by carefully studying their tariffs. It is worth remembering that if you take out a policy, but then do not pay the premiums, then such actions give the bank the full right to terminate the contract and collect the full loan amount from the borrower.

Speaking about tariffs, it is necessary to explain that they depend on a number of factors. In particular, the insurance company takes into account the list of risks that the policy will cover. The technical condition of the residential property is also important - the presence/absence of repairs, materials of floors and walls, number of floors and age of the building, and so on. The amount of tariffs is also affected by the deductible - the amount that the insurance company does not pay when an insured event occurs. The higher it is, the lower the contributions will be. Accordingly, the client here needs to calculate everything very carefully. Another very important point is the peculiarities of operating a residential property. It also has a serious impact on the tariff.

At the same time, it is worth especially noting the fact that if the client refuses to take out life and health insurance, Sberbank automatically increases the loan rate by 1 percent. Therefore, it is worth thinking carefully about what will cost less in the end. On the official website of the financial institution there is a special online calculator with which you can calculate all insurance costs. You just need to enter specific numbers, after which the program will immediately display the result.

Most banks require that clients wishing to take out a mortgage insure the purchased home against the following groups of risks - damage due to fire or water, natural disasters, illegal actions taken by third parties. At the same time, the borrower can expand their list on a voluntary basis. In particular, he has the right to insure the interior decoration of a residential property. However, do not forget that the tariff in this case will be higher. Before signing the contract, an employee of the insurance company will definitely inspect the property for which the policy is issued. As a result, they draw up an act, which must be signed by both parties.

However, there are a number of reasons why you may be denied insurance. This, for example, is more than 70 percent depreciation of a residential property. They can also refuse if the housing is considered dilapidated/unsafe or the building in which it is located is subject to demolition. When purchasing an apartment in a new building, it must also meet certain requirements. In particular, by the time the contract is signed, all construction work here must be completed. Otherwise, insurers may refuse.

The process of applying for a mortgage loan is not as simple as it seems at first glance, because after the borrower has received a positive decision from the bank, he is faced with several other tasks, in particular, one of them is the issue of insuring the collateral. It should be said right away that this type of protection cannot be abandoned insofar as it is contrary to the law. In any case, the purchased housing is the subject of collateral, and therefore must be insured at the expense of the borrower. Property insurance for a mortgage is a procedure that has its own characteristics and nuances; let’s look at them in more detail.

Types of insurance for mortgage lending

Thus, when applying for a mortgage loan, the bank offers its borrowers three types of protection - property protection, title insurance and personal risk insurance. Of all the above types of protection, only one is mandatory - insurance of the collateral. Moreover, this requirement is regulated by law; accordingly, the borrower has no right to refuse it. But it is quite possible to refuse life and health insurance, as well as title insurance.

When insuring the life and health of the borrower, the latter receives a guarantee that the mortgage loan will be repaid by the insurance company in the event of an insured event. That is, for example, if the borrower loses its solvency due to unforeseen circumstances, then the obligations can be assigned to the insurance company. True, the list of insured events is strictly limited, which means that such protection still does not provide a 100% guarantee. Title insurance is protection against claims against collateral from third parties for 3 years. That is, after concluding a purchase and sale agreement, the statute of limitations is 3 years, during which the transaction can be challenged in court. Title insurance protects financial obligations to the bank in the event of title loss.

By the way, one cannot help but say that insurance of one’s property is primarily needed not only by the bank, but also by the borrower himself, because the prospect of a relationship with a credit institution is quite long, during which time the borrower must be 100% sure that his property will remain in good condition. safe and sound, at least until he pays off the bank. What is the advantage of property insurance? If, during the period of repayment of the mortgage loan, unforeseen force majeure circumstances occur with the housing, the insurance company must reimburse the balance of the mortgage loan.

Please note that if unforeseen circumstances occur with housing, then in any case the borrower will be obliged to repay the loan to the bank in full.

What risks does the borrower insure?

In fact, the list of services of insurance companies is quite extensive, so there are mandatory insurance risks and insurance risks that the borrower can take out at his own request. First, let’s look at what the borrower must insure when taking out a mortgage loan, namely under what circumstances compensation will be paid:

fire;
household gas explosion;
attack by intruders and damage to property;
damage to property due to natural disasters;
flooding associated with damage to communication systems;
design defects.

And at will, of course, for a fee, the borrower can take advantage of additional protection. For example, to insure civil liability to neighbors, if he does not intentionally cause damage to the neighbors’ property, then he will not compensate for the damage himself, but at the expense of the insurance company.

Please note that the cost of the insurance premium will directly depend on the set of insurance risks.

How to get insurance

Oddly enough, the borrower must take out insurance before the transfer of ownership of the collateral; accordingly, first you need to take out a policy, then only conclude a purchase and sale agreement and an agreement with the bank. In this case, the insurance premium is paid by the borrower at his own expense; in some cases, of course, banks are ready to finance this event, for example, when the insurance premium is included in the amount of the mortgage loan, but this is most likely an exception to the rule.

Basically, the borrower has the right to choose the insurance company with which he would like to cooperate, however, each bank has a number of accredited companies that they strongly recommend to their borrowers. That is, these are the companies that deserve the trust of a credit institution. By the way, if you ignore the bank’s recommendations and enter into an agreement with a third-party company, then there is a possibility that the insurance agreement in this case will not be taken into account by the bank, therefore, before choosing protection for yourself, it is wiser to consult with a bank specialist.

The second question that interests the borrower is the cost of the insurance premium; in fact, it is a strictly individual question, because the price consists of several indicators:

Loan term, the longer the mortgage loan period, the cheaper the insurance will cost per month.
The technical characteristics of the collateral play a vital role, that is, the greater the risk of loss, the more expensive the insurance premium.
Insurance companies also double-check the frequency of transfer of ownership; the more often the property was the subject of a transaction, the more expensive the insurance premium will be.

In general, each insurance company has its own tariffs for providing services to mortgage borrowers. In addition, it should be noted that the maximum loan term should not exceed 50 years, the minimum term should be no less than the term of the loan agreement. By the way, there is no need to pay an insurance premium for the entire loan period, because the contract can be renewed once a year or once a quarter, and each time the borrower will pay for the service independently.

List of insurance companies

Of course, every bank has a list of accredited insurance companies whose policies are accepted by the bank as protection of the collateral for mortgage lending. However, a potential borrower should know what rates he will face and how the insurance premium is calculated. First of all, the amount of the mortgage loan without taking into account the interest rate is taken as the basis for calculating the amount of the insurance premium. For example, if the value of a property is 3 million rubles, but the bank finances only 2.5 million rubles, then the insurance should be calculated based on the amount of 2.5 million rubles.

The size of the insurance premium is a strictly individual matter; on average, it ranges from 0.3% to 0.6% per year of the mortgage loan amount. For example, if a bank invested 2.5 million rubles in the purchase of real estate, then the annual insurance premium for the borrower will cost from 7,500 rubles to 15,000 rubles. Moreover, every year the amount of the insurance premium will decrease as the mortgage loan is paid off; the insurance premium will depend next time on the balance of the principal debt on the mortgage loan.

Here are examples of which companies provide real estate insurance for Sberbank mortgages and their service rates:

Sberbank insurance – 0.25%;
VSK – 0.43%;
Reso-guarantee – 0.18%;
Rosgosstrakh – 0.17%;
Ingosstrakh – 0.14% per year.

There are only 26 insurance companies on Sberbank’s list, so the borrower can directly familiarize himself with all the tariffs and choose the one that offers the most convenient conditions for him. Among other things, insurance companies offer the borrower other types of protection, namely personal risk insurance and title insurance; any type of protection is paid directly by the borrower at his own expense.

How to buy an insurance policy

To purchase protection, the borrower must prepare as much as possible for this process. You should not think that in order to purchase a policy, he will only need a passport and money; in fact, insurance companies take a responsible approach to protecting the property of borrowers during mortgage lending. That is, the borrower must prepare some documents:

notarized copies of the borrower and his co-borrowers, as well as the seller of the property;
certificate of ownership of real estate, and title document;
permission of the homeowners to sell it if it is in shared ownership;
medical examination of the borrower if he takes out comprehensive insurance, that is, protection of real estate, personal risks and title;
extract from the Unified State Register of Rights;
plan of a residential building and cadastral passport;
certificate from the technical inventory bureau;
independent expert assessment.

This is not the entire list of documents that need to be prepared for the insurance company. But it is worth considering that each individual organization has internal regulations on the basis of which the insurance company provides its services, so first you need to contact the service provider directly to clarify the current list of documents.

Online insurance premium calculator

Please note that if at the time of the sale of the apartment there were minor children registered in it, then the insurance company and the bank must provide permission for the sale from the guardianship and trusteeship authorities.

The borrower must collect a complete package of documents and contact the insurance company directly in order to conclude an agreement. After this, the contracts must be transferred to the lender and this must be done before the transaction and registration of the mortgage loan. By the way, the insurance company cannot refuse to provide the service, but can significantly increase the rate under certain circumstances. For example, if the technical condition of the property is left better, that is, the apartment is located in an old building or there is a threat of force majeure.

What to do if an insured event occurs

Protection of the collateral from unforeseen circumstances is arranged so that the borrower can compensate for damage in the event of an insured event and is guaranteed to receive payment of the mortgage from the insurance company. Therefore, you need to know what to do if an insured event does occur. First, you need to contact the insurance company to clarify the list of documents that need to be provided to receive compensation.

Further, events can develop according to several patterns. First of all, an expert from the insurance company will study the circumstances of the occurrence of force majeure and conduct an examination in order to make a decision on payment of compensation. If the examination showed that the loss of property occurred due to unforeseen circumstances, and not through the fault of the borrower, then the policyholder pays the bank the full amount of the loan to repay the principal debt or, in other words, makes an early payment of the mortgage loan, the borrower is completely released from obligations to the bank.

But in some cases, insurers refuse to pay compensation to the borrower for property damage caused. If this happens, then the borrower has only one option - to go to court and challenge the decision of the policyholder in accordance with the agreement concluded with him. In 90% of cases, the court sides with the borrower and obliges the insurance company to fulfill its obligations in accordance with the agreement concluded between the parties.

Please note that the borrower is in any case obliged to fulfill his obligations to the bank until the policyholder does so, that is, mortgage payments remain the borrower's obligations in accordance with the concluded loan agreement.

So, to summarize, insuring the collateral is a mandatory procedure for the borrower; he does not have the right to refuse it and must fully comply with the bank’s requirement. Further, he has the right to independently choose an insurance company and conclude an agreement with it. In any case, insurance will be advisable for both parties to the loan agreement insofar as the borrower receives a guarantee for the entire loan repayment period against the loss of his property left as collateral with the lender.