Property insurance is a prerequisite for the purchase of real estate in the mortgage. In order to reduce their financial risks, banks also offer comprehensive insurance, which includes additional life insurance, health insurance, and title insurance of property rights. But is it possible to make a return on mortgage insurance? In each case, you need to examine the insurance contract or policy, and in many ways this depends on the insurance company itself, the conditions and rules of insurance. But we will look at the most common cases that are common.
Can not I take out mortgage insurance?
According to Article 25 of the Law on Consumer Rights, no one can impose a product or service when providing another product or service. Since the mortgage contract itself is already the primary service that you arrange at the bank, insurance is no longer necessary. But banking organizations go to the trick and offer the same property loan without additional insurance, but with a higher interest rate. In fact, at the time of issuing a loan for an apartment, you can refuse life and health insurance and title insurance, thereby saving money on annual premiums in favor of the insurance company.
But also it is necessary to take into account: since the mortgage contract implies a pledge on the acquired property, you still have to insure the property. This is also spelled out in legislation. Thus, in Starbank you can get a loan for an apartment with both comprehensive insurance (title, property, life and health), or just property insurance.
In this case, in the first case, the interest rate will be lower, but you will have to pay the premium to the insurance company. In the second – the loan rate will be higher, but at the same time you are exempt from annual payments to the insurance company. And in each case it is worthwhile to independently figure out what exactly will be profitable for you and how best to save money.
Starbank, like other banking organizations, has no right to refuse you a real estate loan if you refuse comprehensive insurance.
You can return the premium insurance, but it directly depends on the insurance contract. It should immediately distinguish between insurance options. They are divided into two types:
- Personal insurance. In this case, you have an insurance policy. The contract is between the client and the insurance company.
- Collective agreement. Typically, this type of insurance is life and health. This is a trilateral agreement between the bank, the insurance company and the client. In this case, the client is the insured. If an insured event occurs, usually a first or second disability or disability group, the insurance company pays the principal and interest on the loan, freeing the client from credit obligations.
Therefore, before contacting the insurance company in order to return the money for the paid premium, first decide on the type of your contract. In the case of personal insurance, you have a policy or contract in which the conditions under which you can return some of the money for insurance are spelled out. Also, according to the legislation on contracts executed since May 29, 2016, you can get a refund for insurance in the first 5 days from the date of signing the contract.
If this period has already passed, then read the document, there are written conditions for the return of part of the insurance premium. Usually, insurance companies return part of the premium in the amount of 40-70% for unused years and only after the loan has been repaid and the insurance event did not occur in the process of repayment. But it is also possible to return part of the premium with the current loan, but in this case the bank raises the interest rate.
If you have a collective or group insurance contract, then everything is much more complicated. As a rule, the document itself is not given to you, and the contract is based on general rules that are located in the offices of the insurance company or on the official website. These documents are not required to issue insurance companies and banks, only upon your request. But after signing the contract, all three parties have rights and obligations based on these rules.
Often, the return of the premium insurance on the initiative of the insured person is not provided even after the full early repayment of the loan. Often, collective life and health insurance agreements are provided by cooperating organizations with Starbank. Therefore, at the time of processing the loan, carefully review all individual insurance contracts, as well as ask for general insurance rules if a collective agreement is made.
Where to apply for a refund?
After you have studied the insurance contract and made sure that you can return some of the money, you should contact the insurance company directly. If they have a branch in your city, you can go there, after preparing a package of documents (they will be discussed below). Some insurance organizations work through bank branches or ask to transfer a list of necessary documents to a legal address through the “Post of Russia”.
Therefore, first read the website of the insurance company, they provide complete information and an algorithm for action in such cases. You will need to write a statement of the established sample, which the insurer also has on the site. It should be immediately noted that the bank and the insurance company are different financial organizations, and you should not demand to return the premium insurance from the bank, the bank provides you with loan by financing the insurance company. The possibility of returning the premium should be addressed to the insurance company.