The Mortgage Law requires an insurance damage, ie a home insurance that covers incidents in the building. Taking advantage of this situation, banks posed a terrible dilemma to those seeking a loan for buying a home: o subscribe insurance entity, or the mortgage is significantly more expensive.
Despite the crisis, in 2012 were signed in Spain nearly 300,000 mortgages according to the latest data from the National Statistics Institute. Much of the housing stock-not all because, unlike the car, the house has no obligation to be signed asegurada- home insurance, but who and why they did it? Are financial institutions forcing consumers to sign their policies with them? Do they cover all our needs such insurance?
The Bank of Spain is clear in stating that "there is no rule requiring formalize any contract of insurance by signing a mortgage or other preexisting subrogated" but at the same time he admits that it is common for banks impose certain requirements for granting mortgages and one of them is usually the home insurance . The following reasoning is as follows: since the mortgaged property is the one that acts as a guarantee of payment to the lender, if there were no insurance, this warranty disappear. Thus, the insurance is necessary and each entity seeks to impose its own. A trend reflected in the Mortgage Law, that with the advent of the crisis has been accentuated further in the search for the most creditworthy customers possible. However, compulsory insurance only refers to the mainland, ie to the property, not the content .
Today, even it is going as before the outbreak of the crisis, when online banking offered great differences from traditional banking. So much so that in recent months the electronic banking has doubled the differential applied to the reference interest rate Euribor, following closely in the footsteps of loans processed in physical offices.
The business of home insurance
Why so much interest from banks in home insurance? Simple, because the business is round because although it is true that the amount of a premium of this kind is low (about 221 euros on average) compared to that of a motor insurance (434 euros on average), ie almost 50% less, profitability is very high (even though the house is worth 10 times): last year, home insurance not only were practically the only multi-risk did not descend (rose 2.66%) but moreover, they are the most profitable insurance. Not surprisingly, on average, 3 out of 4 homes insured does not record any incident during the year and therefore do not have to use their insurance coverage .
As a result, we have a kind of legalized blackmail implicitly deprives consumers freedom of choice in a market that, according to latest official data, has secured 17 million households, representing an average expenditure of 221 euros per year .
What are the weapons of banks to force such insurance? Two in particular: whether or not to grant the loan or the conditions of this dramatically harden if the suggested insurance is not hired.
A study of Kelisto reveals that 85% of those who signed a mortgage have been forced to take out home insurance to access certain improvements in the conditions of the loan but also 93% of them are forced to do it your bank or conditions worsen considerably .
So, get a reduction in the spread of our mortgage will not leave us free: we will have to debit the payroll, having credit cards and / or debit card and also hire home insurance, life or a pension plan, for example. Are we really saving money?
Studies show that on average the price of home insurance offered by a bank insured against a competing company can be between 50 and 100% higher, with fewer cases where the price differences are minimal (20-30%).
The catch is that all, save money by submitting to 'blackmail', since in the long run an increase in the mortgage differential is much more expensive premium cost of home insurance. Mortgages are usually calculated based on the value of Euribor plus differential proposed by the bank.
For a mortgage loan of 135,000 euros to 35 years s, for example, would not be at all surprising that an entity applies pulling too low, a spread of 2.90% if no additional insurance is not hired while if ago, lowering it to 2.70%.Translated into euros, that would mean going to pay a monthly fee of about 575 euros to 557 euros, ie more than 3% that may seem small savings, but only when the year is more than 210 euros and at the end of the loan, it can be nearly 8,000 euros.
The temptation to deny the "recommendation"
Given this covert recommendation by banks blackmail, you can refuse to sign your insurance and then what economic consequences will that action? A rise in our mortgage, no doubt.
If the non-recruitment of home insurance also join the refusal to sign other financial products the bank could lose bonuses in our share, which after 12 months encarecerá our mortgage 13% or what is the same, we will pay nearly 850 euros a year. This is the case, for example, la Caixa, without subscribing to any policy that will pay a mortgage every month fee 558.19 euros, while if we submit to the demands of the bank's share is It will be reduced up to 485.91 euros.
Sources: Kelisto and Lapoliza.com . Details March 26, 2013.
At this point it is important to correctly perform calculations. Thus, if we consider the annual savings of 123 euros you could achieve with Ibercaja if we hire other parallel to the mortgage financial products, it is unclear to compensate us financially. Why? Because the difference is too small, only 2%, and it is quite possible that this cut is less than what we would save if we hire insurance with an insurance company, as we have seen can be up to 50 or 100% more cheaper than with financial institutions.
Thus, if the home insurance with the bank costs us 386 euros and 221 euros with an insurance (75% less), saving 123 euros in the monthly fee we will fall short compared to 165 euros we would save us changing insurance to a third party. Decalogue of home insurance.
Decalogue of home insurance
- When you compare different home insurance do not base your decision solely on price (lowest price is 157.33 euros, compared to 335.10 the most expensive): Be sure to compare the quality and, above all, coverage. In case of loss regret not paying a little more.
- When quotas apply premiums to decide what insurance contract, facilitates accurate data : a variation of the ZIP code, the square footage or the age of the house is reflected in the price of the policy.
- When assessing bonuses in exchange for hiring other products, compare the prices of these if we did through the bank . If the difference is greater than the savings that give us bonuses, we recommend contracting with third parties.
- It is important to have an inventory of our content , especially precious goods such as jewelry, expensive watches or high-end gadgets, including photographs of these and serial numbers.
- Make sure your policy includes the aesthetic reconstruction of the continent (eg repair the facade) if an incident occurs, such as a flood or fire.
- All that invest in security, from alarms to bars, going through a security door, it helps reduce the cost of home insurance premium, unless we ensure only the continent, in which case there will be big differences.
- Take advantage of offers: Insurers launch promotions with discounts of up to 50% if you already have hired another financial product with them.
- If you do a reform in your home , do not forget to communicate at the next renewal of the insurance ; it will lower understand that the materials of the structure have significantly improved.
